Richmond city council will consider reducing credit card service fees to encourage online payments in light of current physical distancing and health guidelines.
The service fee would be temporarily reduced from 1.75 per cent to one per cent for six months and would apply to all online property tax and utility payments.
All other in-person municipal services subject to a credit card payment service fee would remain at the 1.75 per cent rate.
“It is believed that with the proposed reduction in the service fee structure from 1.75 per cent to one percent, property owners will have an incentive to consider this (online) option for their current payment needs,” reads a memo to council.
Council will be voting on the measure at Monday’s general purposes committee meeting.
The city will cover the costs of the service fee reduction, an estimated financial impact of $563,000, which would be funded by the city’s rate stabilization account.
Meanwhile, as a result of the temporary service fee reduction, every $1,000,000 in gross collection by credit card would cost the city approximately $7,500.
“Although the proposed temporary reduction of 0.75 per cent in credit card service represents a real out of pocket cost for the city…it will provide an alternative online payment option for taxpayers during the pandemic period,” reads the memo.
The city processes more than $680 million in property tax, utility and other municipal payments each year, according to the city memorandum.
In 2019, only 1.5 per cent of payments were made using a credit card, while the majority were paid by cheque, online bill or wire payments.
However, according to the memo, the city needs to remain flexible with the payment options it offers the public during the COVID-19 pandemic, as city hall is currently closed. In addition, city hall is not accepting cash payments until the end of September.
“The payment options that meet the recommended health and public safety guidelines during this time is for property owners to either (i) pay online or over the phone…or (ii) pay by credit card (with service fee) through the City’s website,” reads the memo.
According to a city report on the fee reduction, if the bylaw amendment is approved at Monday’s committee meeting, staff will monitor the COVID-19 situation and extend or shorten the six-month reduction period if necessary.
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