The Msunduzi Municipality says it has changed its card payment policy after a councillor raised concern that it was charging an additional transaction fee when customers used their bank cards to pay municipal bills.

A councillor described these charges as a "rip-off".

The municipality was accused of imposing the additional card charge each time a customer paid a bill of R3000 or more using their bank card.

When asked about the charge, the council defended itself, stating that it had been forced to implement this practice because customers were using their cards to pay large amounts, resulting in excessive transaction charges being incurred by the municipality.

Councillors in the city had raised concerns about the charge. The Mercury has seen the charges listed on two municipal bills: one is a card variable charge of R17.30, which increases to R20 once VAT is added; the other is a card fixed charge of R46.16, including VAT.

DA councillor Suraya Reddy, who highlighted the concerns of residents about these charges, stated, “Both these charges are illegal; you are already paying those charges at your merchant (bank). The municipality cannot charge you for using your card to pay.”

“We have written to the acting Municipal Manager, Nelisiwe Ngcobo, to demand answers and urgent action over allegations of residents being unlawfully charged when paying for their bills at the municipality, we are calling for the Acting Municipal Manager to investigate, share the report publicly, and reimburse customers who have been affected” she added.

She said the DA will also support residents who explore legal action against the municipality, urging that all consumers affected by these surcharges must be reimbursed immediately.

Councillor Rienus Niemand of the ACDP expressed strong opposition to this practice, calling it a "rip off".

“Surely, by accepting a bank card, the municipality is aware of the charges that accompany acceptance. To now charge the cardholder is blatantly ridiculous. On the other hand, we have 40,000 prepaid electricity meters in the city. Only 15,000 of these users are buying electricity. The rest are stealing, with no consequences. The outlandish, unaffordable tariffs forced on the paying public, subsidising the thieves, is blatantly unfair. To add additional charges is disgusting. The ACDP opposes this and will fight against this blatant abuse," he said.

In response, the municipality announced that it will cancel the card transaction fees starting from May 1, following a council-approved resolution to end the practice.

It said it had introduced card transaction fees for payments exceeding R3000 as a measure to discourage excessive use of card payments

It highlighted instances where transactions reached amounts as high as R1 million, it said the municipality incurs bank commission charges of up to 1.25% per card transaction value, leading to significant costs.

“There were instances where certain business operators collected cash from other customers and made large consolidated payments using cards. This practice resulted in exorbitant banking charges for the municipality. To offset this burden, a portion of the transaction fee was charged to the customers, and this fee was approved by Council as part of the municipality's tariffs.”

The city said following extensive research, including consultations with banking institutions and alignment with the Reserve Bank’s guidelines, the Council has approved the cancellation of card transaction fees.

The municipality announced new changes - card payments exceeding R30 000 for residential/domestic customers will no longer be accepted, and card payments exceeding R50 000 for business/commercial customers will also no longer be accepted.

THE MERCURY