Yes—premium rewards card usage is expected to continue increasing in utility payments as more consumers rely on rewards cards for recurring bills.

Approximately 82% of U.S. cardholders have at least one rewards credit card, and these cards are increasingly used for utility bill payments, particularly by affluent households and commercial customers who favor rewards accumulation and automated payments.

Because utility bills are typically high-dollar and recurring, premium rewards cards represent a disproportionate share of total processing costs. Without a compliant strategy to recover or offset interchange expenses, utilities should expect continued margin pressure and rising payment acceptance costs as rewards card adoption grows.

Yes—IntelliPay’s service fee program is configured to comply with Visa’s Service Fee Program requirements for eligible utility transactions.

The program is designed to align with:

• Visa service fee rules applicable to qualifying utility merchant category codes (MCCs)

• Card brand disclosure and notice requirements

• Applicable state and local utility commission guidelines

Implementation and eligibility depend on the utility’s business model (public or private), transaction type, and jurisdiction. IntelliPay works with each utility to ensure the service fee structure is properly configured before go-live.

No—only qualifying consumer credit and debit card transactions under the utility interchange program receive a flat per-item rate.

For eligible consumer card transactions processed under the utility merchant category code (MCC 4900), Visa and Mastercard apply a low, flat per-item interchange rate, regardless of whether the consumer card carries rewards or an annual fee.

However, business and corporate/commercial cards are treated differently:

• Business cards (typically used by small businesses) are generally priced similarly to consumer cards and may qualify for the same flat utility interchange rate.

• Corporate and commercial cards, which are issued to larger organizations with multiple authorized users, are not eligible for the flat utility rate. These transactions are processed under standard corporate interchange categories.

As a result, corporate and commercial card interchange rates can vary significantly, often ranging from approximately 2% to over 3% per transaction, depending on card type and program.

Because utilities, government entities, and educational institutions frequently receive payments from corporate and commercial cards, organizations that do not recover processing costs may experience disproportionately high acceptance expenses. Many utilities address this by implementing a compliant service fee program or by applying alternative payment strategies, such as absorbing costs on lower-cost payment methods like ACH or eCheck.

A convenience fee is a fixed, flat amount charged for using an alternative payment channel, while a service fee is a configurable fee applied to eligible card transactions to help recover processing costs.

Convenience fees:

• Are flat, fixed amounts that do not vary with transaction size

• Can only be applied to specific alternative channels, such as online, phone, or IVR payments

• Are subject to strict card brand and channel limitations, which can restrict cost recovery

Service fees:

• May be percentage-based or flat, depending on program configuration

• Can be applied more broadly across eligible card types and payment channels

• Are designed to more closely align with actual processing costs

Utilities are now eligible to participate in Visa’s Service Fee Program, which provides greater flexibility than traditional convenience fees while maintaining alignment with card brand rules and applicable regulatory requirements. As a result, service fees often offer utilities a more effective and predictable approach to recovering card acceptance costs.

No—the Service Fee Program is not considered surcharging when properly implemented for eligible utility transactions.

Surcharging applies primarily to standard retail transactions and is subject to separate and more restrictive card brand rules, including prohibitions on applying surcharges to debit card transactions.

By contrast, utilities processing payments under merchant category code (MCC) 4900 may apply a service fee as part of an alternative payment channel, in accordance with Visa’s Service Fee Program requirements and applicable card brand regulations.

When configured correctly, a utility service fee:

• Is distinct from retail surcharging programs

• Follows card brand disclosure and eligibility rules

• Is designed specifically for regulated utility payment environments

Most utilities operating under eligible merchant category codes (MCCs), including MCC 4900, may qualify for Visa’s Service Fee Program, subject to card brand and regulatory requirements.

Eligibility is determined based on:

• The utility’s merchant category code (MCC)

• Whether the organization is public or private

• The payment channels and transaction types being used

• Applicable state or local utility commission rules

As part of the onboarding process, IntelliPay reviews your business type, processing configuration, and jurisdiction to confirm eligibility and ensure the service fee program is properly configured before implementation.

Most traditional utilities providing electric, gas, water, and sanitation services are classified under Merchant Category Code (MCC) 4900.

MCC 4900 is the standard utility classification used by Visa and Mastercard and is typically required for utilities to participate in network-specific utility programs, including:

• Visa’s Utility Interchange Reimbursement Fee (IRF) program

• Eligible Service Fee Program constructs

Proper MCC classification helps ensure compliance with card brand rules and may allow utilities to access utility-specific interchange pricing and customer-paid fee options, subject to applicable regulatory and card network requirements.

The utility remains the Merchant of Record for all payment transactions.

IntelliPay operates as a third-party payment facilitator and technology provider, supporting payment acceptance and service fee configuration on the utility’s behalf. This structure aligns with card brand requirements, which specify that any applicable service fees must be charged by the merchant or the merchant’s authorized agent—not by an unrelated third party.

Maintaining the utility as the Merchant of Record helps ensure:

• Proper disclosure and compliance with card network rules

• Clear accountability for transactions and customer communications

• Alignment with regulatory and audit expectations

The service fee program can be applied to most utility card payment types, subject to card brand rules, channel eligibility, and proper configuration.

For eligible utilities, service fees may be supported across:

• Online payments

• Phone and IVR payments

• Recurring and autopay transactions

• In-person card payments

Coverage depends on factors such as card brand requirements, transaction channel, card type, and regulatory considerations. IntelliPay reviews these factors during implementation to ensure the service fee program is applied consistently and in compliance with Visa rules.

When implemented in accordance with card brand rules, a utility service fee may be applied to eligible debit card transactions, unlike traditional retail surcharging programs.

Retail surcharging rules generally prohibit surcharges on debit cards. However, under Visa’s Service Fee Program for eligible utilities, debit card transactions may be included when processed through approved payment channels and configured to meet program requirements.

Debit card eligibility depends on:

• The utility’s merchant category code (MCC)

• The payment channel and transaction flow

• Proper disclosure and program configuration

IntelliPay reviews these factors during implementation to help ensure debit card transactions are handled in a compliant and consistent manner, supporting broader cost recovery while aligning with card brand regulations.

ntelliPay’s Service Fee Program is designed to comply with Visa’s Service Fee rules, which are distinct from general retail surcharging rules and are specifically permitted for eligible utilities.

The program aligns with Visa’s Core Rules and Visa Product and Service Rules (VCR/VPSR), which allow qualified utilities operating under eligible merchant category codes to apply service fees when configured in accordance with program requirements. These rules are separate from standard retail surcharging regulations and are tailored to regulated utility payment environments.

Visa’s official Product and Service Rules can be reviewed here:
👉 https://usa.visa.com/support/consumer/visa-rules.html

As part of implementation, IntelliPay reviews the utility’s MCC classification, payment channels, and jurisdictional considerations to ensure the service fee structure is properly configured and compliant before go-live.

Compliance with Visa’s cost recovery rules requires proper transaction classification, required data submission, and clear customer disclosure before payment is completed.

Specifically, compliant implementation involves:

• Correctly identifying the transaction type and applicable payment channel

• Submitting the required Merchant Verification Value (MVV) as part of the transaction flow

• Clearly disclosing the service fee to the customer before the payment is finalized

IntelliPay manages these technical and configuration requirements during implementation to help ensure the service fee program operates in alignment with Visa’s Core Rules and Visa Product and Service Rules (VCR/VPSR).

No—most utilities are able to implement a service fee program with minimal operational disruption when the program is properly configured and supported.

In many cases, utilities can launch a compliant service fee program within a matter of weeks, without requiring significant changes to internal workflows or staffing. Key technical, compliance, and configuration requirements are handled during implementation.

IntelliPay supports utilities by:

• Managing program setup and configuration

• Ensuring alignment with card brand and regulatory requirements

• Assisting with customer and board communication

• Providing ongoing support as card network rules and regulations evolve

This approach allows utilities to recover processing costs while maintaining operational continuity and regulatory alignment.

No—a service fee program applies only to customers who choose to pay by card and does not affect rates for customers using non-card payment methods.

Under a service fee model, processing costs are assessed only on eligible card transactions. Customers who pay by cash, check, ACH, or other non-card methods are not charged a service fee, helping ensure that payment acceptance costs are not distributed across all ratepayers.

This approach is often viewed as a more equitable cost-recovery model, as fees are incurred only by customers who elect to use card-based payment options.

Service fee programs are permitted in many states when implemented in accordance with card brand rules and applicable state and local disclosure requirements.

While service fees are widely used by utilities across the U.S., eligibility and implementation may vary based on:

• State statutes and regulations

• Public utility commission or local authority requirements

• Disclosure and consumer notice obligations

• Card brand program rules

As part of implementation, IntelliPay reviews jurisdictional considerations and card brand requirements to help ensure the service fee program is configured appropriately for the utility’s location and regulatory environment. IntelliPay also monitors regulatory and card network rule changes and updates its solutions as requirements evolve.

State regulatory requirements for utility fees are primarily governed by State Public Utility Commissions (PUCs) or applicable local government statutes.

While card brand rules are generally uniform nationwide, state and local laws determine:

• Whether fees may be passed on to customers

• Which fee types are permitted (e.g., service fees or convenience fees)

• Disclosure, notice, and approval requirements

Because regulatory authority and requirements vary by jurisdiction, utilities must ensure that any fee program aligns with both card network rules and applicable state or local regulations. IntelliPay reviews these factors during implementation to help utilities structure fee programs in a compliant and jurisdiction-appropriate manner.

IntelliPay is a PCI DSS Level 1 Compliant Service Provider, the highest level of certification for organizations that store, process, or transmit cardholder data.

PCI DSS Level 1 compliance requires:

• Annual third-party security assessments

• Ongoing vulnerability scanning

• Strict controls around data encryption, access, and monitoring

This certification helps minimize the PCI compliance burden on utilities, as sensitive card data is securely handled within IntelliPay’s compliant environment rather than the utility’s internal systems.