Contents
Executive Summary: Unlocking Card Fee Savings for Utilities
Utilities serving under 200,000 residents are facing unsustainable credit card processing costs—often $50,000 to $200,000+ every year. With Visa’s recent update to Merchant Category Code 4900, small utilities can implement compliant “service fees” for card payments, shifting these costs away from the operating budget and back to customers who choose to pay by card.
Key Benefits
Budget Relief: Reclaim $50,000–$650,000+ annually by offsetting credit card processing fees with a transparent, cardholder-paid service fee.
Legal & Compliant: Visa’s service fee model is specifically designed for utilities—fewer regulatory headaches and clear customer disclosures.
Flexible Structures: Choose a flat (commonly $2–$3.50 per payment) or percentage (1–3.5%) fee; align with your actual transaction costs.
Implementation Snapshot
Timeline: Most utilities move from approval to launch in 2–3 months.
Customer Response: Industry experience shows minimal resistance when fees are well-communicated—customers value transparency and choice.
Technology: Most modern payment processors can implement these fees with minimal changeover.
Trends from the Field
Rochester (NY): Proposed $3 per residential transaction, $16 for commercial.
Pinellas County (FL): $2.95 fee per $250 paid.
Brownwood (TX): 3.5% per transaction.
The Bottom Line
Visa’s updated service fee rules offer CFOs a fast, compliant way to turn credit card processing into a cost-neutral function—freeing up significant budget and maintaining customer satisfaction. Now is the time to audit your card payment volume, model savings, and bring this option to your board or council for rapid implementation.
Next Steps:
Model annual savings using your billing data
Review with board/legal for buy-in
Coordinate with payment processor—most can automate fee calculation
Communicate proactively for a smooth rollout
This approach is now mainstream for community-sized utilities. With costs rising, standing still means falling behind—embracing service fees is a straightforward win for your financial health and operational resilience.
About IntelliPay
We help Utilities optimize their payment processing by eliminating payment processing costs, expert guidance, and reliable technology solutions. Our team combines deep industry knowledge with personalized service to ensure every client gets the best possible payment processing solution for their business.
The information provided on this page is for educational and informational purposes only. We make no representations or warranties regarding the completeness, accuracy, or security of this content, and all advice is provided “as is.” The content does not constitute legal, financial, or professional advice, and readers act on it at their own risk
