Why is Leesburg electric charging credit and electronic fees? How can they be avoided?

LEESBURG — Leesburg's electric utility is one of the latest power providers to charge fees for credit and electronic transaction fees.

Starting March 1, the city will begin charging a transaction fee for all utility payments made by electronic means.

Though new to customers this year, the fees have been there since 2015, but the city-run utility has pick up the tab — that is, until now.

Why are credit card transaction fees still a thing?

The Electronic Payments Coalition, an advocate for credit unions, community banks, and payment card networks, attributes the jump in fees nationwide, quite simply, to Americans preferring to use credit cards, according to a recent USA Today report.

The report added that, in June, a bipartisan group of senators, including Senate Majority Whip Dick Durbin, D-Ill., and Sen. Roger Marshall, R-Kan., proposed the Credit Card Competition Act of 2023 aimed at lowering the credit card processing fee for businesses and consumers.

The bill, originally proposed in 2022, didn't advance in Congress.

The Senators based their bill on the argument that Visa and Mastercard have a duopoly on the credit card market (more than 80% of credit cards transactions are processed by them) and had hopes of ensuring large credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed, senators said.

By introducing more networks into every transaction, they believe the increased competition would lower fees for businesses and consumers.

“If merchants are allowed to simply choose the cheaper credit card routing networks that haven’t invested in the latest security technology, consumer payment data would be vulnerable to foreign networks,” Jeff Tassey, Electronic Payments Coalition chairman, said.

According to Fox Business, the bill has prompted what observers on Capitol Hill have described as a particularly intense lobbying offensive to oppose the legislation, with critics calling the measure "anti-free market" by allegedly imposing price controls and serving big business interests.

How can you avoid the fees in Leesburg?

Leesburg defied trends and absorbed fees since 2015, the precise year a Florida court decision made it possible for companies to charge a fee again if they chose to. Late last year, the city announced that lower energy costs would allow them to pass the costs onto its customers, reducing rates.

In fiscal year 2023 the expense of credit and electronic transactions cost the city more than $400,000 with the fiscal year 2024 amount estimated at $450,000, the city explained in a press release.

In other news about utility fees: Late fees back on Leesburg power bills

"This issue was discussed during the city's 2024 budget workshops and it was determined that the city should no longer pay these fees."

ACH/eCheck utility payments will have a $1 convenience fee, and credit/debit card utility payments will have a $3.50 convenience fee.

Utility customers can avoid the fees by using the auto-pay option linked to a checking or savings account, paying in person at City Hall with cash or a paper check or paying with cash at AMSCOT locations.

Questions regarding the charges should be directed to the Customer Service Department at 352-728-9800.

This article originally appeared on Daily Commercial: Why are Leesburg utility customers charged new credit, ACH fees?