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The original item was published from 7/21/2017 1:39:00 PM to 12/2/2017 12:00:02 AM.

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Posted on: July 17, 2017

[ARCHIVED] Service Fees for Credit Card Use Added to Some City Payments Starting September

Credit Card in a man's hand

Modesto City Council voted on July 11, 2017 to approve a resolution assessing a service fee of 2.4% for all debit and credit card transactions, excluding utility services on regular monthly utility bills, parking garage fees and transit fare media transactions including MAX, Bart Transportation and Dial a Ride. These fees go into effect on September 1, 2017.

The City collects payments for a variety of services such as business licenses, payments for Transient Occupancy Tax on hotel rooms, parking citations, golf fees, Centre Plaza events, Parks and Recreation rentals and registration/event fees, permits, and fines.

The City of Modesto merchant services vendor charges fees for debit and credit card transactions the City accepts payment for. As of September 2017, the City’s General Fund will no longer absorb the credit card fees associated with these services. Customers frequently choose electronic payment methods for convenience, accounting for roughly two thirds of the payments being made by customers. Service fees are being implemented to cover these costs paid by the City for accepting debit and credit cards.

Service fee payment terminals include Building Inspections, Parks, Recreation and Neighborhoods, Modesto Centre Plaza, City Golf Courses and Customer Service- Cashiering, Business Licensing, Parking Citations and Accounts Receivable.

The new service fee model will generate a savings to the City of approximately $110,000 annually. Based on the annual transactions estimated for Fiscal Year 16-17, there are about 13,000 transactions currently being processed via debit and credit cards. Over the past four fiscal years, merchant fees have increased 10% and are expected to continue rising. A variety of customer payment options, including cash, check, credit card and debit card are available. Customers will be prompted to “approve” the 2.4% fee prior to completion of payment when using a debit or credit card.

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