The inconvenience of the fees attached to paying your Long Beach utility bills online may be on their way out as the city council voted Tuesday night to eliminate the convenience fee for using debit or credit cards and entered into a new contract for the city’s payment processing system.
Kubra America, an Arizona-based company, will take over the city’s payment processing system for an amount that could total over $984,000 annually over the next three years. The contract also allows the city the option to renew for two additional one-year agreements.
Long Beach Financial Management Director John Gross said that it’s not often that he gets to make exciting announcements like this.
“Right now these utility customers pay $3.75 if they pay by credit or debit cards and they pay 95 cents if they pay by e-check,” Gross said. “These will now be no-charge and those completely free services will encourage more use of our fast and easy internet and telephone payment services. And we will now be able to offer mobile payment options on your phones at no additional cost.”
The costs of implementing the changes to the convenience fee schedule are expected to be absorbed by the individual departments (gas, water, refuse) with the cost of processing credit/debit and eCheck payments being passed on to customers in the general rate structure.
Under the city’s current payment method options customers are not charged a fee if the payment is deducted straight from a bank account but they do incur costs when paying by phone or online.
The new contract would drop the fees for eCheck payments by internet (17 cents) and by phone (32 cents) as well as debit/credit card payments made by internet (0.13 percent + $1.035) and by phone (0.13 percent +$1.185), all of which would be paid by the city. An estimate by the city anticipates that more than one quarter of those currently using check or other methods will convert to eCheck or credit/debit card to make their payments once the program is implemented.
All other fees associated with making payments at retail store locations and obtaining permits with credit/debit cards would remain in place. Implementation of the project is expected to begin three to four months after the contract is executed with a project completion date taking up to another 15 months to complete.
“This council will do a lot of things in our time together, there will be very few things that will be more popular than the one you’re voting on tonight the second it’s implemented,” said Mayor Robert Garcia prior to the council’s vote. “I guarantee you, the amount of correspondence I get on this issue is almost at the top of the list.”
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