Business

City adds fee to credit card payments

By Bill Moss, Published: February 2, 2015

City utility customers who pay their water or garbage bill with a credit card will be charged a fee starting Feb. 1.

The city has been absorbing the fees its vendor charges when utility customers use credit and debit cards. That amounts to a subsidy of $75,000 to $150,000 a year that all ratepayers are covering for those who use credit cards, Finance Director Lisa White said. In order to avoid passing the fees on to all utility customers, the city will now pass on the fees that banks charge for credit and debit card transactions.
The charge for an e-check, when the customer authorizes a bank payment through the credit card service, is $1.25. The new credit and debit card fee is $2.95 for a bill up to $300, and $2.95 for each $300 over that. For large users, the fees would add up quickly. A water bill of $3,000, for instance, would result in a surcharge of $29.50.
"We want everybody to know if you have a large water bill this is not the way you want to pay," Finance Director Lisa White said.
The City Council approved the charge when it adopted the 2014-15 budget last spring but gave the water department plenty of time to notify customers of the new charges. The city has done that by inserting notices in water bills and making recorded calls to residents who signed up for City Hall updates.
The credit/debit card fee rate for utility payments is regulated by VISA and cannot be a percentage of the transaction but must be a rate per unit or transaction on all utility payments, the city said. About 3,000 utility customers currently pay by credit/debit card. About 2,500 have signed up for bank draft.
The per transaction rate does not apply to tax payments. Tax customers who pay by credit or debit cards are charged a fee of 2.75 percent of the total bill, a rate set by the state. The city said in a news release that it had negotiated the best possible rates through its credit card processor, Paymentus. Once the current three-year contract expires the city will continue to negotiate for the lowest possible fees for customers.
Ratepayers can avoid fees by signing up for monthly bank draft (and receiving a $25 credit, through March 31), paying by check via mail or in person at City Hall or paying by cash at City Hall. The customer service window is at the lower level. For information or to sign up for bank draft payments call 697-3052 or visit cityofhendersonville.org.