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Sierra Vista proposes letting payment processors pass exact card fees to users after city paid $200k+ in fees
Summary
City staff proposed a resolution allowing payment processors to pass card-brand/processor-specific merchant fees directly to the card user, citing that the city paid just over $200,000 in card fees July–March and wide variability across processors and card types.
Finance staff proposed a change to allow the city’s payment processors and merchant platforms to pass exact merchant fees through to the customer at the point of sale rather than the city absorbing an estimated $200,000+ in card fees for the July–March period.
Staff explained the rationale: fees vary substantially by processor and card type (one processor’s average fee was cited at 1.6%; another product line averaged about 14% for some services), and a uniform city-wide surcharge would overcharge some customers and undercharge others. "These fees are quite variable... If you have the base card, it's a lower fee. But if you super exclusive ultra mileage rewards cash back, that fee is higher to us," staff said.
Officials said customers can still pay by check, cash or bank bill-pay to avoid fees, and online checkouts will show the fee before completion. Council asked whether AMEX could be accepted online; staff replied AMEX historically posed integration issues with one portal but can be accepted in person and the city can choose which cards to enable in specific payment channels.
Why it matters: the change shifts operating costs for card acceptance from the general revenue base to card users who opt for card convenience; it also requires customer-facing notices at point of sale and attention to which processors and channels (e.g., RecTrac, Square) support itemized fees.
