Agenda item

The Cabinet Member for Finance and Corporate Services considered the attached report which put forward a decision of a renegotiated contract with the current provider for merchant acquiring services. This contract enables the Council to process debit and credit card payments across its services, supporting the secure collection of income from residents, businesses and partners. The report set out the revised commercial terms  with the incumbent  provider to reduce the Council’s annual merchant acquiring cost from approximately £1.02m to £490k, delivering savings of around £530k per annum and addressing the current budget gap. The proposed decision enabled the Council to secure materially improved rates while avoiding service disruption, system reconfiguration costs, and implementation risk.

This approach was compliant with procurement regulations, maintains PCI DSS (Payment Card Industry Data Security Standard) compliance, and ensures uninterrupted income collection across all payment channels.

The proposed two-year terms would also allow the council to take forward a competitive procurement exercise to secure further future potential savings.

The Cabinet Member considered the information in the report and took into account the fiduciary duty of members, whilst further noting that the decision allowed savings of £1.1million from procurement activity which in the wider context of required savings helped protect frontline services. The Cabinet Member for Finance and Corporate Services,

RESOLVED

1.    To approve the commencement of the re-procurement of the merchant acquirer provision as permitted under CSOs 0.08 and 2.01b.

2.    To approve the award of a contract to Global Pay for a term of years at a value of £980k in accordance with 7.02 (The Council may call-off from Frameworks established by other public sector organisations) and CSOs 0.08 ( Cabinet Member decision ) and 2.01 c) (Cabinet approval of award of contract valued £500k and above).

3.    To note that current arrangements are financially unsustainable and create a significant ongoing revenue pressure.

4.    To note that the proposed approach will reduce annual costs, ensure procurement compliance, and maintain continuity of critical income collection services.

Reasons for decision

The Council currently processes approximately £86m per annum in income through card payments.

Projected merchant acquiring costs of circa £1.021m in 2025/26 significantly exceed the available budget and represent poor value for money.

Continuing under existing terms would create a recurring budget pressure and expose the Council to financial risk.

Re-procuring via the Crown Commercial Service Framework 6325 Payment Acceptance, Lot 1 with the incumbent provider enables the Council to secure materially improved rates while avoiding service disruption, system reconfiguration costs, and implementation risk.

This approach is compliant with procurement regulations, maintains PCI DSS (Payment Card Industry Data Security Standard) compliance, and ensures uninterrupted income collection across all payment channels.

The revised commercial terms would reduce the Council’s annual merchant acquiring cost from approximately £1.02m to £490k, delivering savings of around £530k per annum and addresses the current budget gap.

Alternative options considered

Do Nothing
Continuing under the existing contract terms would result in ongoing budget overspend of over £500k per annum. This option is not financially sustainable and does not represent value for money.

Full Open Procurement Exercise
Running a full competitive procurement could test the wider market; however, it would require significant officer time and specialist resource, introduce implementation and transition risks, and could disrupt income collection. There is limited organisational appetite for system change which will be resource intensive and delay any immediate reductions, and no identified budget to support a complex transition.

Recommended Option – CCS Framework RM6325 Lot 1 Re-procurement with Existing Provider Re-procuring CCS framework with the incumbent provider secures improved commercial terms while maintaining operational stability. This option balances cost reduction, compliance, deliverability and risk, and is therefore the preferred approach.

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