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Verizon Adds $2 Charge For Paying Your Bill Online
An anonymous reader writes with this excerpt from geek.com (based on a report at Droid Life) that makes me consider quitting or at least suspending the very expensive service 3G data service I get from Verizon: "With 2012 about to start, it seems Verizon has decided paying your bill online or over the phone is
now worthy of an extra charge. So, from January 15, anyone choosing to pay their monthly bill using either method will incur a $2 charge. Verizon is classing the charge as a 'convenience fee' which translates into them deciding allowing you to pay either online or over the phone is a convenience. They also explain in the FAQ above that the fee allows them, 'to continue to support these bill payment options.' Really, Verizon? When did offering online payments or accepting phone calls from customers get so much more expensive?"
The fee is waived if you pay by electronic check or auto pay. This only effects last minute payments.
The fee is waived for autopay.
The economy sucks, they want all their accounts on autopay so the phone bill gets taken out before other bills if the customer's money can't pay them all.
Beware of autopay. Once you bill is autopaid you have a lot less leverage in billing disputes.
Cash and cheques don't incur the same fees as online processing, which usually entail VISA/MC/AMEX/etc taking their 2% or more of the transaction in fees. In addition, they are Non Qualified transactions. This is because the card is not present, thus there is a higher likelihood that there could be a charge back, so the processing company charges an additional fee.
I think Verizon is idiotic for adding this surcharge that is so obviously a cash grab, but I would like to dispel the idea that the online transactions are inherently cheaper. They have staff at retail outlets for sales already, so the fixed costs for the rentals are already taken into account.
There's two obvious reasons for this: Points on my credit card (i.e. free money/miles/ etc), and convienience. It allows me to watch only my credit card bill and pay it once. Also, there's a little bit of money to made on the float (not much these days w/ the low interest rates).
Mail them a cheque (err, check, my American friends) and make a point. If millions of customers did this, their payment processing costs would go through the roof.
I have mine tied directly to my checking account and payments are done as ACH at no cost to me. Verizon also pushed me toward One Bill and then paperless billing to save the environment, and now they want to charge me $2.00 a month to do their job: I'm sorry, when I enter all the data and submit my bill every month *I AM DOING THE WORK FOR YOU!* It should not cost them a dime for me to submit my bill, directly to their systems, online.
It's the complete reverse in the rest of America, too. Everyone else is pushing for online payment and electronic billing because it saves on paper and postage costs.
Verizon is the first company I've seen try to pull an asshat move like this. I think why Verizon is trying it now involves a couple things. For one, large telecoms like Verizon and AT&T have for years felt entitled to licenses to print money hand over fist, and whenever revenue drops due to market changes or technological development, their biggest priority is to find somewhere else to recoup that lost revenue. My guess here is that Verizon noticed that a majority of their customers were already paying their bills online, so they decided to start charging a fee to do it, knowing that their customer base already appreciates the convenience of online bill payment and inertia would prevent them from paying by mail. Other service providers, public utilities for example, likely have much older, entrenched, and less 'tech-savvy' customers so they need to provide incentives to move towards online billing and its associated cost savings.
A majority of their customers certainly pay their bills online, but they do it automatically and are hence exempt from this fee. Verizon is doing something very simple, encouraging their customers to prefer the automatic process over the manual one. There is undoubtedly a price break to handling the exact same payment method month after month vs handling a unique one each time, and they know they will save more money than they will lose in pissed off customers.
BUT, having a credit card, and using it, and paying it off is actually all but required in this country. Having no credit history is just as damning as bankruptcy in America. Right now, I'm applying for a mortgage. I was told by the bank that my $20k+ in student loans and my $18k car loan...help me. It's twisted, but true. Also, living on credit and using a credit card for ease are not the same. Also, many banks DO charge for external transfers of money here.
I think you missed the point. They are recouping the fees charged by Visa and Master Card. Those fees have recently increased by the way. This is way you can still pay on line for *FREE* if you pay though your checking account. This is also why most of the smaller restaurants in my area and I'm sure other areas of the US have $10 and $20 minimums for credit cards. It is also why my uncle, who was also a small business owner, did like it when people paid with credit cards. You really should look into where this money goes before judging verizon to harshly for trying to get some of that money back. I for one will continue to pay online as I always have. Through my checking account that they already have stored on their server.
Because in the US the banks actually discourage transfers by making them inconvenient and costly. For example, Bank of America charges $25 to send a domestic wire transfer and $12 to receive one.
The fee does not apply to either ACH or AutoPay transactions. This leaves credit card payment as the only mechanism which does incur the fee. Verizon can't come out and say that the fee is because you're using a credit card, because the terms between credit card processors (e.g. MasterCard, VISA) and merchants (in this case, Verizon) specifically forbid altering the price if a credit card is used. When you pay a merchant with a credit card, the merchant only gets 97-99% of the price you pay with the card. 1-3% goes to the credit card company. Verizon can accept payment in any of three ways, but one of them costs Verizon more than the other two ways, and they consequently charge a fee. It's not exactly in-line with their costs, but considering what a monthly phone bill for a smart phone costs, it's not grossly far off, either.
"Give away the stone, let the oceans take and transmutate this cold and faded anchor." - Maynard James Keenan
Well, in our world, for one. Not paying a debt until it's due doesn't constitute credit, it's called "float" in financial circles. If someone sells you a good or service and doesn't require payment until the end of the month, then it's not "buying on credit" to hold off paying until that date. So, in short, you're right that it's not length of repayment that's a factor, but whether you're being extended credit (buying something for the promise of repayment against future income) or whether you're being given a float to allow you to gather the funds in the form agreed upon (which is why so many businesses started offering due dates for purchases in the first place).
Virg
You need a buffer between you and the people you owe money to. Getting cajoled into automatic payments is a trap. They often take place by ACH (bank draft) and you are at the mercy of the vendor for any refunds unless they draft a credit card. Watch that option slip away soon.
I object to power without constructive purpose. --Spock
If that is your definition of "living on credit", then we need to understand that the term is not what is meant by most people who consider credit corrosive. When people talk about living on credit as a bad thing, it is carrying balances month to month and accepting the interest rates while only paying the minimum. That does happen all too frequently in the US and is a serious structural problem.
However, using credit as a float is a sound business practice that has been used for centuries to ensure that payments can be made as needed while waiting for your customers/employers to pay up on their due date. You then pay off the float when the influx of cash comes in on a monthly basis, for instance. You may incur charges or interest, but these are usually fairly minimal compared to what you would deal with by carrying a balance with no end in sight.
New York State General Business Law Section 518: Credit card surcharge prohibited.
No seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash, check, or similar means.
Any seller who violates the provisions of this section shall be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars or a term of imprisonment up to one year, or both.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
The credit card companies don't want merchants to add a surcharge for credit card payment. Calling it a "convenience fee" and then "waiving" it for ACH payment is a way for merchants to circumvent these contractual restrictions, much as some gas stations give a discount on gas purchased with a gift card (and gift cards must be paid for with cash or EBT card).