Administration plans to increase the number of payment options available to utility customers by accepting online credit card payments for utility bills in August 2023. To facilitate the move to accepting online credit card payments for utility bills, customers choosing to use this payment option will be charged a convenience fee of 2.25 per cent of the total transaction to cover the cost of the fees charged by credit card companies and related third-party credit card transaction costs. This ensures only customers choosing to use credit credits cards as a form of payment for their utility bill are charged the third-party costs associated with credit card payments and does not result in an increase in utility rates for all customers to cover the cost of credit card usage.
Changes to Schedule A of The Regina Water Bylaw are required to permit the charging of convenience fees for those customers who choose credit cards to pay their utility bill payment.
Financial Impact
The recommendations in this report will not impact existing utility rates. This fee is voluntary and will only impact those customers who choose to pay online by credit card. The City does not receive any portion of these fees directly.
Policy/Strategic Impact
The recommendations in this report support the City’s Strategic Priority of Operational Excellence by improving service delivery to our utility customers.
Environmental Impacts
None with respect to this report.
The City could choose not to charge a convenience fees to those customers who pay their utility bill using the on-line credit card payment option, with the City paying the related credit cards charges. This is not recommended, as these costs would need to be passed on to all utility customers (regardless of whether they used a credit card to pay their utility bill), resulting in utility rate increases.
The option to pay online via credit card will be included with the utility billing information on Regina.ca, in utility bills, and in any payment-related letters to customers.
With implementation of the online customer portal as part of the Water Meter Upgrade project, the City will begin accepting online credit card payments for utility bills in August of 2023. Under regulation of the Financial Consumer Agency of Canada, banking industry merchant rules allow for merchants (e.g., City of Regina) to charge a “convenience fee” for certain types of transactions to offset the fee charged by credit card companies for the transaction. The convenience fee must be clearly disclosed to the cardholder before the transaction is completed and the cardholder must be able to cancel the transaction without penalty if they do not wish to accept the convenience fee.
A per-transaction convenience fee ensures that only the customers choosing to use this service are charged and these fees do not contribute to increased utility rates for all customers. The City’s online payment service provider will charge a convenience fee to the cardholder for the transaction instead of charging a per-transaction fee to the City for accepting the credit card. The online payment service provider then remits a portion of the convenience fee to the credit card company and retains a portion for their services.
The convenience fee is reflected as a separate charge from the cost of the transaction. The convenience fee is charged by the City’s online payment service provider and is a non-refundable charge to the cardholder. The City is not charged any service fees for the transaction, nor receives any portion of these fees.
Both SaskEnergy and SaskPower charge a convenience fee to customers choosing to pay their gas and power utility bills using credit cards. Saskatoon does not currently accept credit card as a form of payment for utility payments.
As the City’s online payment service provider is collecting and remitting it to the credit card companies on behalf of the City, the convenience fee must to be added to Schedule A of The Regina Water Bylaw, Bylaw No. 8942. The current fee is 2.25 per cent of the final transaction amount.
The recommendation contained within this report requires City Council approval.
Respectfully Submitted, Respectfully Submitted,
Tanya Mills Barry Lacey
Acting Director Executive Director
Assessment & Property Revenue Services Financial Strategy & Sustainability
Prepared by: Brenda Hutch, Manager, Assessment & Property Systems