Why is Olathe charging convenience fees for credit card processing? Return to top
We are responding to requests from our customers for a way to allow credit card payments without raising our overall rates. The new process is a way to keep our rates as low as possible. The cost to process credit card payments is significant for a local utility. Because we are a not-for-profit utility, there are no profits to cover these fees, and they would have to be passed on to all customers through rate increases.
Customers who don't use credit cards to pay prefer that only those who pay by phone/online incur the fee, rather than the fee expense be included in rates for all customers. Additionally, many customers want more payment options such as Internet payments and pay by phone.
As a result, we have partnered with Official Payments Corporation (OPC) to provide customers the options they want in the most cost-effective manner. Official Payments Corporation has the technology, expertise and capabilities to provide the desired services. With this partnership, ratepayers will not need to pay for costly upgrades to our system.
How much is the convenience fee? Return to top
$1.85 for residential customer payment amounts up to a maximum payment amount of $125, and $1.85 for each $125 increment thereafter. Over 97 percent of residential payments made within the last 12 months were under $125. Business customers will pay $7.95 for maximum payment amounts up to $560, and $7.95 for each $560 increment thereafter. Convenience fees are set based upon the average bill for each customer type.
|Convenience Fee & Maximum Payment Schedule|
|Class||Convenience Fee||Maximum Payment|
Why is there a maximum payment amount? Return to top
Official Payments sets the convenience fee based upon an average payment per customer type (e.g. residential customers usually have much lower bills than business customers). They use the convenience fees to cover the service charges credit card companies charge for their services. The maximum payment amount is set to ensure that Official Payments does not lose money on the transaction. If your bill is for more than the maximum payment amount for your customer type (e.g. for residential customers it is $125), you can pay your bill in increments of the maximum payment amount until your total bill is paid. For example, if a residential bill was for $200, the customer would make two payments ($125 and $75) to pay for the total bill. A convenience fee will be charged per transaction.
I don't get charged at other places for paying electronically. Why will I have to pay a convenience fee when I pay my utilities bill? Return to top
Retailers and other businesses that take electronic payments simply build their payment processing costs into the price of the products or services that they sell. Olathe is a cost of service utility and would have to pay for those service charges through a general rate increase. Customers who don't use credit cards to pay prefer that only those who pay by phone/online incur the fee, rather than the fee expense be included in rates for all customers.
Do other utility companies charge a convenience fee? Return to top
Yes, utility companies across the country have implemented convenience fees.
Why is the fee different for residential customers versus business customers? Return to top
The fee Official Payments will be charged by the credit card companies varies depending on the transaction amount. Business accounts typically pay larger bills and therefore the fee is larger. The utility rates you are charged on your account determines whether or not you will be charged a residential convenience fee or a commercial convenience fee when paying by credit/debit card.
Does the convenience fee go to the City of Olathe? Return to top
No, the City of Olathe does not receive any part of the convenience fees associated with the processing of credit card payments. Our vendor, OPC, charges these fees to cover the service charges the credit card companies bill them for handling the payments.
Who is Official Payments Corporation and how were they chosen as our vendor? Return to top
Official Payments Corporation is an electronic payment vendor. OPC processes payments for government organizations across the country, including the State of Kansas and several counties in Kansas. From a field of four vendors, OPC best demonstrated the ability to provide:
How do I know my information is secure? Return to top
We follow strict policies and regulations regarding the release of customer information and the retention of information. All transmissions sent to OPC use secure SSL encryption, the industry standard. OPC also uses encryption to transmit payment information to us.
Will I be able to view my bill online? Return to top
Do you accept credit card payments through the mail, lobby and drive through? Return to top
Credit Card Association rules and regulations do not allow us to accept payments through these channels unless we were to charge a fee for all payments made through those channels. That would require charging fees for cash, checks, etc., which we can not do.
Is City of Olathe allowed to charge this convenience fee? Return to top
Yes, credit card companies allow businesses and organizations to charge a convenience fee for all payments made through specific channels, such as phone and Internet. The ability to pay by phone and Internet provides added convenience for customers who choose to use these specific channels. Customers may pay through these channels, through Official Payments Corporation, using a credit card, debit card or electronic check.