Iqaluit mulls limits to credit card transactions
The city is losing money on service fees, councillors learn
The City of Iqaluit is considering a ban on paying municipal bills by credit card.
At a presentation to the city’s finance committee on Aug. 18, corporate services director John Mabberi-Muydoni complained that the city was losing money on the service fees that credit card companies charge for transactions.
Visa, for example, charges a two-per cent fee per transaction.
Mabberi-Muydoni told councillors that when a company pays a $350,000 bill by credit card, that two per cent adds up.
On top of that, Iqaluit offers a two per cent discount when anyone pays a municipal bill early.
So if a company pays a $350,000 bill by credit card early, the early-payment discount added to the credit card company’s service fee costs the city $14,000.
“Why should a corporation be allowed to pay Visa [or other credit cards] such a large amount of money? It should be by cheque,” he told the committee.
Mabberi-Muydoni proposed a $10,000 limit for credit card transactions.
Councillors alternately suggested charging the credit card service fee to the customer, but learned that service agreements with credit card companies specifically prohibit that.
They also suggested ending the incentive discount for early payment if it’s made by credit card.
In the end, councillors asked Mabberi-Muydoni to investigate how other cities manage credit card transactions and return with some proposals.