The City of Covington is considering paying the 2.95 percent credit card convenience fee that it normally passes on to customers who use credit or debit cards to pay their bills.
Some customers have complained about the fact they have to pay an extra fee when they use a credit card, but Covington Information Systems Manager Bobby Johnson said that fee comes from the credit card companies, not the city.
However, the city is willing to cover that fee for consumers, because credit card transactions are cheaper and easier for the city than check payments, Johnson said. The city is negotiating with the credit card companies to pay a flat rate per transaction, around $2.95 or lower, which would be cheaper than paying 2.95 percent of a transaction, because utility bill payments averaged around $275 per month during the last year.
In addition to removing check processing fees, increased credit or debit card payments would further insulate the city from the danger of bounced checks. Johnson said the city received a lot of bad checks in 2008 and 2009 during the economic downturn.
During FY2010, customers paid $38,207 in transaction fees for 6,375 transactions. If the city paid $2.95 per each of those transactions, it would have only paid $18,806.
"We’re offer customers the opportunity to pay by phone, internet or in person. We offer all those options and we’re try to make them all equal (in cost)," Johnson said.