Denver Drops Credit Card Swipe Fees

Without the fees, credit card payments surged.

March 31, 2014

DENVER – Following two months of a citywide experiment that waived credit card fees for most credit card payments, an obvious conclusion was drawn: Denver residents hate credit card fees, reports the Denver Post.

City officials told the news source that they were surprised by how much card fees “had been leading people to pay by cash or check instead.” And without the fees, credit card payment actually surged — in some categories, card receipts in January and February increased tenfold or more compared to the same period in 2013.

The news source writes that receipts for property taxes paid online with credit cards increased from $892,000 to $17.6 million — or 20 times as much. At the counter, card payments for property taxes increased by 18%, to $37.1 million. Overall, Denver’s credit receipts in the first two months of the year were up 48% ($68.4 million).

On January 1, 2014, the city of Denver waived the standard 2.5% swipe fee on credit and debit cards for property and excise taxes, plus court fees, while in-person debit card transactions had cost a flat $3, writes the news source, noting that an online vendor waived the fee for photo-enforcement traffic fines Feb. 1, and traffic tickets followed March 1.

"What we've learned is that any convenience fee turns people off," David Edinger, the city's chief performance officer, told the news source.

In Colorado, most metro cities and similar-sized cities don't charge card fees. For example, the city of Aurora only charges a fee for card payments in one case: an online fee of up to $300 when applicants submit materials for building permits because processing payments can run $12,000 to $15,000. However, in mid-April the city is planning to nix that fee. According to Ted Frost, Aurora’s treasurer administrator, the city's choice was between absorbing the large fee or hiring another employee to process paper building permit submissions, he told the news source.

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