Parking surcharge on the cards

Greens councillors have slammed Leichhardt Council’s recent move to impose a 50 cent surcharge on all credit card payments at parking meters, after it voted to pass the cost of upgrading meters on to the community.

Credit card terminals at parking meters in the local government area (LGA) are currently being converted from magnetic strip readers to chip readers to prevent card skimming fraud, at a cost to council of over $450,000.

The upgrade is part of a worldwide push by MasterCard and Visa to encourage all businesses and merchants to use the chip-based EMV system.

Labor councillors Simon Emsley and Linda Kelly put forward the motion to introduce a 50 cent surcharge at the council meeting on April 29.

“If the credit card [companies] are going to increase the value of their commodity, then the users of that commodity should bear the cost of that,” Cr Emsley said.

The 50 cent proposal was in response to a recommendation by council staff for a 10 cent rise in parking fees across the board, regardless of the means of payment. This would recoup the same amount of money in the same period of time as a 50 cent fee for credit card users.

“People who use coins, it has nothing to do with them,” Cr Emsley said.

Deputy mayor and fellow Labor councillor Linda Kelly said the council had made the fairest choice.

“After considering all options, I thought a 50 cent surcharge … [was] the most reasonable option,” argued Cr  Kelly.

“Even with this surcharge, our car parking rates remain comparable to other Sydney councils.”

A Visa spokesperson told the Inner West Independent earlier on in the year that the cost must be met by all merchants who have previously relied on magnetic strip technology.

“All businesses across Australia have been making the upgrade and about 95 per cent of terminals are now chip,” the spokesperson said.

The council was warned by Australian Parking and Revenue Control, which operates the 139 meters that accept credit cards in the LGA, that it would be liable for any card skimming if it did not upgrade to EMV technology.

Liberal councillors voted for the 50 cent fee with their Labor counterparts and the motion was carried.

Greens councillors voted against the motion, supporting no charge at all. Councillor Craig Channells said that drivers should not be slugged with a fee when council can afford to pay.

“Council has funds in its reserves to pay for these upgrades,” Cr Channells said.

“Just because the credit card companies are charging that to us doesn’t mean we should be passing that onto residents.”

He said that council should be encouraging credit card use instead, because cash costs a substantial amount of money to collect and then bank.

“This is an arbitrary charge … It’s not related to the amount that you’re paying and there’s no relationship to cost recovery in that sense either,” fellow Greens councillor Rochelle Porteous said.

“Credit cards have a number of advantages … because they enable us to do it without the cost of cash.”

Leichhardt is the only council planning to implement a surcharge in direct response to the EMV upgrade. It makes $7 million a year in parking revenue, compared to the $78.8 million made by the City of Sydney.

“Yes, it’s a very convenient form of trading, but it does involve a fraud risk. And if there’s a risk, then I believe that credit card users should be the ones who bear the cost of abating that risk,” Cr Emsley said.

The 50 cent fee will come into effect in July. It will take six and a half years to recover the EMV upgrade cost.

The cost of adding a surcharge is estimated at $13,900, factoring in one hour’s work per machine.