News

City will continue allowing residents to pay with plastic

Thanks to a new bylaw, the City of Penticton will continue allowing residents to pay for city services online using their Visa card.

Few communities accept credit cards for the payments, due to the transaction fees charged by credit card companies. Visa and MasterCard fees are about 1.65 per cent of the transaction amount. If the city absorbed the fee, it would have to increase costs in other ways — posing an additional burden on non-users.

Last year, the city entered into an arrangement with Paymentus, a third-party system, to accept credit card payments for certain city services online.

Paymentus, according to Colin Fisher, the city’s chief financial officer, charges the customer a service fee to cover their costs and the credit card transaction fee, passing the transaction amount back to the city.

“If one of our customers pays a business licence over the internet, the $6.50 becomes Paymentus’ charge for covering all of their costs. The Visa charge is absorbed as part of the $6.50,” said Fisher.

“The city, in effect, receives the complete amount of that transaction.”

That changed late last year when Visa contacted Paymentus, ordering them to discontinue adding a surcharge to Visa transactions.

Mastercard and debit cards were not affected by the ruling.

There was a loophole however.

“The Visa Rules permit service providers to surcharge on Visa cards where a local law or regulation requires that such service providers be permitted to surcharge,” said Michael Hughes, Paymentus customer service director, in a letter to the city.

Passing the new bylaw, Fisher told council, would allow the city to charge a surcharge on Paymentus transactions.

“Basically, it buffers the city from the commission cost that is inherent in any credit card transaction,” he said. “Visa has informed us that the local law or regulation can supersede the Visa rules.”

Coun. John Vassilaki wondered why the city wasn’t able to accept credit cards like any other merchant.

“Everybody else in town does it, and right across the country, why do we have to have a surcharge? That baffles me,” said Vassilaki.

According to the original 2012 staff report recommending the Paymentus, in order to accept credit card payments directly, the city would have to go through an in-depth process to become payment card industry (PCI) compliant, to the tune of $100,000.

“The city is not prepared to absorb the cost of the convenience,” said Mayor Garry Litke, referring to the merchant costs inherent in accepting credit card payments.

“The point of this surcharge is so that we don’t have to cover the costs associated with having a credit card payment system and if we don’t pass this, then we can’t process any visa transactions for people to pay city bills,” said Coun. Wes Hopkin.

“It’s about making sure that we continue to  allow visa transactions and the city doesn’t have to subsidize any costs associated with that.’

The bylaw permitting the collection of a surcharge for the use of credit cards passed with a 6-1 vote, with Coun. Vassilaki in opposition.

 

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.

You might like ...

Refugee living the Canadian dream
 
Community rallies support for Penticton teen
 
ELECTION 2014: Osoyoos mayor admits sign incident factored into decision to retire
Bobbitt hearing back on hold
 
Eight break-ins reported in Penticton last weekend
 
Crowd backs sale of Blueberry Creek Community School
SHSS students perform Les Miserables
 
School District shifts major asset
 
Flight4Life expects to break world record on Thursday

Community Events, October 2014

Add an Event

Read the latest eEdition

Browse the print edition page by page, including stories and ads.

Oct 24 edition online now. Browse the archives.