Independence negotiates lower credit card convenience fee
When the city of Independence reinstates its convenience fee for payments using credit card or e-check Tuesday, that fee will be a bit lower for customers.
The convenience fee will be $3.95, down $1 from before, the city said this week, after it renegotiated its deal with processing vendor Paymentus.
The convenience fee had been waived since April 1, 2020 – shortly after the pandemic started – as a way to help citizens cope with sudden costs or loss of income. When the City Council voted May 3 to reinstate the convenience fee starting Tuesday, City Manager Zach Walker said staff was in the midst of negotiating for a better deal. The back-and-forth talks lasted a few months before the two sides settled on $1 less.
The city started implementing the $4.95 fee in 2018, and at the time city staff said about 40 percent of utility customers paid via credit card or eCheck online or over the phone. Walker said that percentage stayed fairly consistent during the pandemic. The fee covered what the city’s credit card processing vendor charged, as the city cannot make money on processing. The city’s contract with Paymentus runs through 2023.
Since Independence waived the fee almost 14 months ago, it has paid $1.425 million in processing costs through the utility funds – $260,000 in the last three months of 2019-20 fiscal year and $1,165,000 thus far in the 2020-21 fiscal year, which ends June 30. The city also has budgeted $300,000 to cover processing costs for customers who pay with a credit card in person at the Utilities Center at 17221 E. 23rd St.
When the council voted for the fee two years ago, Mayor Eileen Weir said at the time she believed “citizens should not be asked to subsidize their neighbor’s use of convenience.”
The convenience fee does not apply to mail-in or drop-box payments at the Utilities Center or City Hall or any form of walk-in payment, including credit card, and utility customers who have automated bank draft payments are not charged extra.
Blue Springs does not charge a fee for paying its water bill online with credit card, while Lee’s Summit has had a $2.95 fee. Jackson County has fees that are paid directly to the third-party vendor upon transaction – up to $2.15 per transaction, or 2.15 percent for transactions greater than $100 on credit cards and 1.5 percent for transactions greater than $66 on debit cards. Kansas City also has a third-party convenience fee.