LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7018 NOTE PREPARED: Dec 30, 2024
BILL NUMBER: SB 542 BILL AMENDED:
SUBJECT: Electronic Payments to Governmental Bodies.
FIRST AUTHOR: Sen. Spencer BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: The bill amends the definition of "electronic payment" for purposes of the statute
governing electronic payments to a governmental body (defined as the state or a state agency) to include a
payment made by means of any of the following: (1) Interactive voice response. (2) A digital wallet. (3) A
digital currency.
The bill provides that after June 30, 2025, a governmental body may not enter into or renew a contract: (1)
that is made with a provider or vendor of payment processing services; and (2) the terms of which provide
that any: (A) vendor transaction charge; (B) discount fee; or (C) other service charge or fee; assessed in
connection with the contract is payable by the person who makes an electronic payment.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Beginning in FY 2026, the bill provides that state agencies may not
enter into or renew contracts with payment processing vendors that require vendor transaction charges,
discount fees, or other service charges or fees paid by the person making an electronic payment.
Indiana currently contracts with two payment processors. In October 2022, the state entered into a $60 M
contract with both companies. The term of the contracts is for 4 years, with an option to renew twice for a
total of 6 years.
In FY 2024, consumers paid $24.3 M in convenience fees. The largest amount of convenience fees were paid
to the Bureau of Motor Vehicles, Department of Revenue, Department of Child Services, and the
Professional Licensing Agency. Sixteen agencies paid merchant fees totaling approximately $2.34 M.
The table below provides the current fees for the payment processors.
SB 542 1 Payment Processor Rate
Credit Card Processing
(excluding American
Express)
Credit Card Processing
(including American
Express)
Tyler Technologies $0.40 1.96% 2.06%
Catalis, LLC
(Rebranded from Value
Payment Systems )
$0.00 2.15% 2.25%
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana Department of Administration, any state agency using electronic
payments.
Local Agencies Affected:
Information Sources: Indiana Office of Technology; State of Indiana Public Contract Search;
https://www.in.gov/inwp/files/Tyler-Indiana-Payment-Processing.pdf;
https://www.in.gov/inwp/files/VPS-State-of-IN-Slick-2-Final-Draft-2.pdf
Fiscal Analyst: Chris Baker, 317-232-9851.
SB 542 2