The following commentary first appeared in CalMatters. It has been edited lightly for style and brevity.
By JUDY LIN, CalMatters.org
Gov. Gavin Newsom wants credit cards to be accepted at all offices of the Department of Motor Vehicles. The bad news? Customers will have to pick up the tab on credit card fees.
Got a driver’s license to renew or a vehicle to register? Well, if you were planning to pay for it with a credit card, you may want to do it this summer.
Under the new state budget, the DMV will be making an administrative change to pass credit card fees on to customers, a practice that typically adds 2 or 3 percent to the cost of a transaction. The switch, expected by October, means drivers will pick up $45.3 million a year in transaction fees currently absorbed by the department.
That cost is expected to grow to $71.8 million a year once the DMV adds field offices and expands self-service terminals. In a state with 27.1 million drivers, that works out to about $2.65 per driver.
DMV spokesman Jaime Garza confirms that the change will be happening but says there’s not a set date for the switch. It’s unclear how much the fee will be.
“There are some technical requirements that are necessary to implement this process,” Garza wrote in an email. “We will be communicating with the public after we have determined a date for the passing of the fee.”
The switch is the result of a performance audit that looked for ways to improve operations and customer service. For years, the DMV has not charged a fee when customers use Visa, Mastercard, American Express or Discover to make online payments or at self-serve DMV Now kiosks.
But as the administration pushes the DMV to embrace technology and battle long wait times, it means adding the capacity to process credit cards at 172 offices — and passing the fees to customers.
While it may be cold comfort to consumers watching each penny, Department of Finance spokesman H.D. Palmer said it’s common for government entities to pass transaction fees to consumers. A number of other state agencies such as the Franchise Tax Board, Department of Transportation and the Department of Consumer Affairs already charge credit card processing fees.
Of course, you can always avoid the fee by paying with cash, check, money order or debit card.
