Municipalities don’t want the risk, cost of credit card payments

By Monte Sonnenberg, Simcoe Reformer


Norfolk County won’t take your credit card for the payment of taxes.

However, it wants the public to know there are third-party brokers out there who will act as a go-between for property owners who wish to pay in this manner.

Accepting property tax payments from a credit card is not attractive to municipalities.

Credit card companies charge vendors between 1.5 and 3 per cent per transaction. Fees like this add up quickly when customers are dropping $2,500 at a time or more.

Municipalities also don’t want to be responsible for credit card information. These details are attractive to computer hackers. Municipalities worry they could be liable for financial losses if credit card information is extracted from their data bank.

There are, however, credit brokers who are willing to bridge the gap between municipalities and residents who want to put their property taxes on plastic.

At a recent conference of the Ontario Municipal Tax & Revenue Association, Norfolk staff was informed about a third-party credit card company called Plastiq.

In a report to council Tuesday, tax collector Sue Boughner said Plastiq and credit brokers like it facilitate credit card payments on behalf of organizations that don’t traditionally take them. Along with municipalities this includes the Canada Revenue Agency, utilities, and tuition departments at post-secondary institutions.

“We may already be receiving payments in this manner and not even know it,” Boughner told Norfolk council this week.

Boughner noted there is strong demand in some quarters for paying taxes by credit card. Many card companies offer reward incentives based on usage. This has prompted some people to use their credit card wherever possible.

“In an effort to improve customer service to property owners, alternative payment methods that present viable payment options at minimal or no cost should be considered,” Boughner says in her report. “Staff recommend the use of third-party payment processors as the best option to facilitate property-tax payments by credit card.”

Boughner warned that credit cards may not be the best option for residents who leave their tax payments to the deadline.

It can take three or four business days for third-party brokers to transfer money from these transactions to the municipality. If the transaction is left to the deadline, Boughner said taxpayers stand a good chance of being hit with a late fee.

Norfolk council agreed that letting ratepayers know about credit-card options is a good idea.

“If this helps a little to keep us out of the collections business, I’m all for it,” Mayor Charlie Luke said. “If people don’t have the cash and still want to pay their taxes, here’s a way to do it.”