City
Citizens looking to pay court fines online have been out of luck since mid-September, with the city's information technology department working to restore functionality to a system put in place in 2008.
Four years ago, Tulsa agreed for the first time to have two separate vendors process online utility payments as well as court fines.
Now, about 7 percent of citizens pay utilities via a one-time payment made through a service provided by Virginia-based Official Payments, according to the City. Among those paying court fines, 9 percent make use of the online payments processing offered by JPMorgan.
"The industry standard for e-payment adoption, where people physically log on and make their payment through either credit card or through ... an e-check transaction, it's about 10 percent," said Chad Becker, a treasury analyst with the city's finance department. He noted that some may balk at the fees associated with the online utility payments -- $2.95 for credit or debit card and $1.15 for e-checks.
Wider business trends show a dramatic change in how people make non-cash payments, even over the last 10 years or so. Check use, in particular, has declined nationally from about 60 percent of non-cash payments in 2001 to about 20 percent, according to a study released last year by the Federal Reserve System. Now, roughly 80 percent of non-cash payments are made electronically.
The city still requires a check or cash to make payments at a window at a Reasor's, or even at the city's offices. Phone payments allow for payment via a credit or debit cards (as well as check), but those types of payments also require the citizen to cover the fee costs.
Becker said roughly 15 percent of citizens sign up to pay their utility bills through an automatic withdrawal system, which does not involve outside vendors or customer fees.
Tulsa residents who pay with a card can expect a modest break next year, with a new vendor, Citi Transaction Services, set to take over for Official Payments, which at one time was called ChoicePay and was based in Tulsa before being acquired by a larger, Virginia-based company.
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The new fee will be $1.85 per transaction, regardless if payment is made via check or card. "That's an important part that plays into the cost, which is one of the many items that is reviewed and poured over during the bid evaluation process," Becker said.
As far as the provider for payments made to court fines, Becker said no change is imminent -- though work is being done to repair the system.
"I know that it's a good chunk of the business, and it's a huge convenience for those time-sensitive payments," Becker said. "And I know they're wanting to get it back up and running as soon as possible. It's going to be sooner rather than later."
In Oklahoma City, no fees are associated with making utility payments online. However, Tulsa isn't an outlier in passing some fees to customers, according to Michelle Allen, a city spokeswoman.
She wrote in an email that the Tulsa Metropolitan Utility Authority "made the decision to charge convenience fees to citizens for utilizing the e-payments system, rather than passing these costs across the entire customer base," and that "this convenience fee structure is similar in scope and pricing to other municipal utility providers of similar size across the country."
More and more cities offer the online payment option for services, said Mary Feeney, an assistant professor at the University of Illinois at Chicago's public administration department.
Her work includes a study of cities smaller than Tulsa, ranging in population from 25,000 to 250,000. In 2010, about half offered online payment options for city services or fines; last year, that number increased to 61 percent.
Feeney said governments categorize fees and departments differently, making it difficult to get more detail about how many allowed utility payments online, for example.
Some of the decisions to move forward with online payments systems are motivated by city finances, she said.
"By moving things online, you can remove people from the equation a little bit and streamline things," Feeney said.
Finding any sort of trend with fees passed on to consumers would be difficult, Feeney said.
"In some cities, they're gung ho about starting an online program and they just absorb the costs," she said, while other municipalities might have a completely different philosophy. She said it isn't unusual for a city to work with vendors. "A lot of cities outsource that type of work," Feeney said.
But as the technical issues involving the court fine payment system show, the city still must provide tech support to interface with the payment processing system.
With the court payment system, "the issue is on the City's side, not JPMorgan's," Becker wrote in an email, explaining that the initial validation provided by the customer (for example, the ticket number) must be processed before being "passed over to the service provider's site."
The companies make money, but not so much from the city when the fees are passed on to citizens. According to Allen, the city had been paying Official Payments approximately $270 monthly to process the payments.
In contrast, the court system -- which may be less complex than the utility processing system -- requires the city to pay JPMorgan Chase about $2,000 monthly.
The city doesn't routinely track historical data on how popular the online payment system has been over the years, according to Allen.
Mailed payments are actually processed by Bank of Oklahoma, noted Becker, so it's not city workers directly spending time to process those payments.
"From a standpoint of just increasing efficiency, that's something that we're always looking to do," Becker said.
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