For many years, local governments were reluctant to accept credit card
and electronic check payments because of the fees incurred to use the
services. Agencies that chose to accept credit cards often paid for
the services out of their operating budgets, limiting funds for other
programs or raising taxes. Now, local governments are implementing
electronic payment methods that use a flat convenience fee to increase
receivables, strengthen collections, provide an alternative form
of payment for constituents and increase revenue.
Credit card companies used to fight the idea of allowing government
agencies to charge convenience fees for residents who paid with their
cards, arguing that the fees would discourage credit card use. But,
as people grew accustomed to paying the fees for non-government
services or online purchases, eventually, the credit card companies
changed their tune.