Peru officials discuss adding 3% to 4% fee to credit card payments

City has paid more than $71,000 to credit card companies for processing

Peru City Hall in Peru, Illinois

Peru residents paying their water bills with their credit cards may find a 3% to 4% convenience fee added to their bill soon, officials agreed during Monday’s finance meeting.

Peru Finance Officer Tracy Mitchell said there are two components that go into the credit card fees, the software bill, the city paid $16,722 in annual fees. Then there is the credit card processing fee, in which the city has paid $54,526.

The city has paid more than $71,000 or about $6,000 a month to make it convenient for residents to pay their bills and building permits on credit.

Mitchell said the city used to charge residents a 3% fee prior to the COVID-19 pandemic, but chose no longer to charge a fee after the city shut down, so the residents are no longer charged a credit card processing fee.

“It was determined that since we were shut down we wanted to make it as convenient for everyone as possible,” Mitchell said. “I think what we are looking at is putting these fees back on, what should that percentage be? And how would we go about doing that?”

Alderman Andy Moreno seemed to agree with charging a 3% to 4% fee since it is normal for most businesses in the area to charge a fee.

“You go anywhere for dinner, most of these places are getting a 3% to 4%,” he said. “The way I’m reading this we are incurring costs for you to have to pay your water bill.

Alderman Tom Payton agreed saying the city should go back to passing on that fee.

“What they charge us for the credit cards, we charge them,” he said. “We don’t need to make money off this.”

Mitchell said right now pinpointing a specific percentage to charge the residents would be difficult, since the technology they have may not allow the city to charge a fee and a percentage.

“Right now, I don’t have anything I can give you that says this is the percentage we pay,” she said. “I can give you an average in terms of what we pay our software processor. It’s $1.25, every time we swipe or enter somebody’s credit card, in addition to the percent we pay for the banking side of it.”

Payton asked why they couldn’t just charge the same way the company and the bank charge the city, saying if they charge $1.25 plus 4% we charge the same. Mitchell said she didn’t think the city could program the software that way.

City Clerk Dave Bartley said the city offers a “feeless system” for the residents and the city if they choose to use a bank draft.

Alderman Mike Sapienza asked if the city’s competitors like Ameren, charge a fee for using credit cards. Alderman Jason Edgcomb said they didn’t charge for debit or bank draft.

“If you’ve got a decent credit card, you getting 1% or whatever it is back from the credit card, you’re making a little money on it,” Sapienza said.

Edgecomb said many people pay with their debit cards and they will not be getting a percentage back.

Mitchell said it doesn’t matter if a resident pays with a credit or debit card, the city pays the fees.

“We are not trying to put a hardship on residents, " she said. “We want to encourage them to use the bank draft.”

The council agreed to move forward with charging the residents to use a debit or credit card but said more work needed to be done to determine what the fee or percentage would be.

The Peru City Council will meet 7 p.m. Monday, Nov. 6, at 1901 Fourth St.