Thursday, July 14, 2011

Public Service

The city of Pittsburgh, like many other cities is in the midst of an ongoing financial crisis. It's possible that's too strong a word as the response doesn't appear overwhelming to someone not part of the process, and if it is a crisis it's a fairly long crisis. In any case, they're taking a real close look at revenue streams and one that gets a lot of talk is parking.

Not to long ago the city parking authority upped the rates in some of the busier neighborhoods and concurrently lengthened the hours drivers would have to feed the meters. Most of the time when you park you are dealing with individual coin-op meters, but a few of the city lots now have the central ticket printers that take paper money and credit cards. I was just reading an article that said the mayor wanted to replace a bunch of the older style meters with more of the ticket printer types. This initiative was getting a cold reception from the city council because changing the gear also apparently meant raising the rates again.

Interestingly the reason for the rate increase wasn't so much paying for the new gear or installation as to cover lost revenue from credit card transactions. When someone parking uses their credit card instead of paying cash a potion of the payment goes to the company handling the transaction as opposed to going to the city in full.

This got me thinking. It's possible we missed something in the recent credit card reform effort.

It seems to me that in the case of a public transaction that maybe the card company shouldn't be permitted to take a fee. Perhaps as a condition of their being permitted to do this type of business they should be required to handle municipal payments for free. This can't really be too significant a potion of their total revenue. Not to say they wouldn't miss the money, but it doesn't seem too unfair a idea to me.

In fact, I think I'd expand the notion and say that any civic transaction at all: local, county, state, or federal out to be handled as a public service by the transaction companies. And while I'm reaching I'll go one better and say any charitable transaction or transaction with a not-for-profit entity should also fall into this category.

No more dollar loses on charged tickets for not for profit theaters. My mother would have rejoiced.

I guess there would be a cry of "something for nothing" here. Maybe it is too much to expect getting this for absolutely zero. There are quantifiable costs to the vendors for facilitating these transactions. The recent legislation capped the allowable swipe fee for all transactions. Maybe we could allow a slightly higher swipe fee for regular transactions in exchange for no fee on civic and charitable transactions. Or, maybe we could allow a dollar for dollar write off of the money they would have made on these transactions but didn't as a business loss.

Running it over in my mind I think it's ultimately doable, and the cities could sure use the money (to say nothing about how little any of us wants to see parking rates go up again).

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