May 5, 2009
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News: NY City Battle Over CC Service Fee
Two New York City Council members want things to change for individuals who pay parking tickets on line. Currently there is a $2 service fee when individuals pay their tickets by credit card online; however, no fee is charged if the fine is mailed in. Some New Yorkers want to know why there is a charge for credit card payment which requires no man power to process and yet, no fee is charged when an individual mails the fine in which requires manual processing by a staff member. Councilman Simcha Felder, from Brooklyn, and Councilwoman Gale Brewer, from Manhattan, believe this is sending the wrong message to taxpayers. Councilman Felder says the city should be cautious about giving the impression they are trying to nickel and dime their residents. In light of the fact that the city actually saves money when individuals pay online, Felder and Brewer believe it is time for the City to eliminate the processing fee. Councilman Felder and Councilwoman Brewer introduced their new legislation that would ban city agencies from charging fees for credit card payment of fines, civil penalties, taxes or fees. The new measure would include other city government departments as well.
The city of New York’s parking tickets account for approximately 10 million violations a year. A major revenue source, parking tickets are predicted to generate approximately $595million for the city of New York this year and expected to increase to $686 million next year. The city collects on nearly 66% of the violations. Approximately 25% of those collections are paid by credit card online amounting to nearly $4 million of revenue a year. The city began accepting credit card payments in the mid 1990’s when it responded to individuals including international tourists who were unable to write checks or had difficultly accessing cash. As a result, massive numbers of cars were being towed away.
The process of accepting credit cards was not an easy one for the city. It required long hours and days of negotiations between the city’s Law Department and the lenders. If the change is voted in, New York City will not be the only city to eliminate fees for online payments; San Francisco eliminated its $2.75 charge in 2007.