In 2024, a 2.6% processing fee began being collected on all credit and debit card transactions at most city facilities. The extra charge was implemented when the city’s credit card processing vendor decided all such transactions needed to be done with chip-enabled cards.
The chip functionality requirement is the industry standard and best practice for secure transactions, said Tom Sluis, spokesman for the city of Durango.
He said implementation of the chip requirement changed the vendor’s fee structure. The company previously charged the city a flat rate for the processing service but shifted to a percentage-based fee, billing the city 2.6% for each transaction. The model used by the vendor makes the “customer” responsible for the percentage, Sluis said.
Since it is a fee initiated by the vendor, it immediately gets passed from the city to the payment processor, Sluis said. The city is making no additional revenue.
Sluis said businesses in the private sector can choose to absorb the processing fee but they are not required to disclose its presence and may decide to offset it by raising the price of their merchandise.
Evan Schertz, owner of Maria’s Bookshop, said that while he chooses to absorb the processing fee instead of passing it on to customers, the bookshop is a private business and can set prices to ensure the store’s profits are not harmed by the extra charge.
While the city could do the same, Sluis said the city is a public agency and does not operate on profit margins.
“We are not making a profit on this fee” he said. “The city decided to be transparent about passing on these vendor-imposed fees to customers rather than increasing service costs internally.”
If the city decided to offset the 2.6% fee by raising prices across the board, anybody paying with cash or check would be charged for an increased cost that is not being utilized by them.
“The city is very sensitive to any additional fees that are paid by residents, but card payments are the fastest, most efficient and convenient way to help the public,” Sluis said. The city will continue accepting cash or check for services, which allows people to avoid the fee.
Credit card fees are not unusual. Sluis drew attention to the fact that the city is not alone in implementing such fees. He said the Colorado Department of Motor Vehicles and La Plata County also have card fees for certain services.
The city did not issue a news release announcing the credit card fees, saying such fees are industry standard, so making the announcement was unnecessary.
jbowman@durangoherald.com
