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Wednesday, January 6, 2016

You Can Thank VISA and Bank of America for Making Parking in S.F. More Expensive

Posted By on Wed, Jan 6, 2016 at 12:51 PM

click to enlarge NIALL KENNEDY/FLICKR
  • Niall Kennedy/Flickr
The Municipal Transportation Agency will soon take a bite out of your wallet, but don’t storm the mansions and burn anyone in effigy just yet. This time, it’s not their fault. They say the devil made them do it.

(Actually, it was VISA and Bank of America. But close enough.)

As expected, the MTA board voted unanimously to hike parking meter fees a quarter an hour citywide yesterday, with the pinch taking effect in February. But they want you to know they’re doing it under duress.

“This is a one-time, forced action,” board member Malcolm Heinicke said at the meeting. He did not add, “Really, honestly, pinky-swear.“ But it was more or less implied.

The problem is that six months ago, the MTA began charging a 27 cent fee whenever you feed the meter with a credit or debit card. That covered the transaction costs that credit cards always charge for the privilege of swiping, and nobody really minded, because it was cheaper than the ticket you’d get if you didn’t have enough change on you.

And, besides, if you were militantly against it you could choose to keep paying in cash. It was a rare case of transit policy where everybody wins, and nobody could possibly get mad.

So, naturally, a bank and a credit card company had to crap on it.

Turns out that the city, under its contract with VISA (and Bank of America Merchant Services, which processes the payments), isn’t allowed to charge fees like that. But nobody realized this until after the city had been doing it for months.

Even after VISA complained, it was a while before the city could identify the full parameters of its mistake. That might not be entirely their fault either, because you know how complicated your credit card agreement is? The city’s is even worse. MTA Director of Finance Sonali Bose struggled to explain the nuances:

“If you pay taxes, you can charge a fee. But if the public is touching the meter, or is touching the transaction, then it’s not considered a convenience fee” and so is not allowed, Bose said.

Apparently, credit card companies employ cunning Zen riddles when drawing up agreements with municipalities. I’ve spent all day trying to wrap my feeble brain around this concept, but every time I think I’m getting close it slips out like a wet bar of soap.

“It took us months to figure out,” Bose added. So at least it’s not just me. (Nobody at MTA was available to explain this in greater detail, presumably because they have literally anything else to do instead.)

If they’d kept it up, the city would have lost its contract, and there was even the risk that we’d have to pay back the fees already collected. But suspending the fee without making up the money would have cost the city over $6 million in unfunded transaction charges, in a time when we are (somehow) running nine-figure deficits.

The only legal way to cover the cost of paying with cards was to raise rates for everyone. Is that fair? Not entirely. Is the board happy about it? Probably not. (They took pains to note that they’ve kept meter fees flat since 2009, even while every other city service got more expensive.)

But they can take consolation that this is probably the first and last rate hike that won’t incite a smoldering grudge against them in the hearts of San Franciscans. We all know what it’s like to be dicked over by a credit card company while you’re already broke.

Update: SFMTA spokesman Paul Rose clarified the conditions of San Francisco's VISA contract: The city may charge a fee only when the customer is not physically present for the transaction, such as when paying online. What exactly the company gets out of that prohibition Rose couldn't say.

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