Town decides against credit card payments

Municipalities are ever vigilant for ways to increase revenues, especially those receivable through residents’ annual taxes and fees. Accepting credit card payments is one way to make payment of obligations easier for people who do personal business online, or use plastic instead of cash and checks.

The town of Marion considered this spring accepting credit card payments of personal and real estate taxes, license fees and water and sewer payments. But a look into swiping cards and taking card numbers over the telephone or the Internet revealed costs the council judged too high Monday.

Councilman Dr. Jim Gates, a member of the finance committee, and Deputy Clerk Sue Clark found initial set-up fees between $25,000 and $35,000, according to bids from financial institutions, plus an annual fee.

In addition, a 2 percent charge per transaction is typical, Gates said—another cost that would be borne by the town.

By Gates’ calculations, if even half of the town’s citizens paid their town obligations by credit card, it would cost the town $30,000 to collect that approximately $1.5 million.

Gates said credit card payments would be convenient for residents and might earn them air miles or other premiums offered by credit card companies. But the transaction cost, and the fact that the town would realize no savings in personnel time spent processing payments, presented problems for Gates.

“Do we think we have a number of people not paying, and will they pay with credit cards?” Gates asked. “We can cut off their water if they don’t pay. We have control over that.”

In recommending a “no” vote on the proposal, first set forth by council member Ken Heath who said he concurred with Gates’ reasoning, Gates said, “The loss of revenue outweighs any positive factors. The cost to set it up, the yearly fees, I don’t think it’s a benefit to anybody to do this.”

The council unanimously agreed.