New Oxford Utility Bill Pay More Convenient, Costly

New online option to pay electric bill is more convenient and costly

By Yaeko Takada, Southern Studies major, The University of Mississippi

ytakada@go.olemiss.edu
Citizens first learned about the online payment option in the billing envelopes from the city electric department in January. A city spokesperson says the program has one primary purpose.

“To better serve Oxford’s electric, water, sewer and sanitation customers by providing a more convenient avenue for payment,” said Rob Neely, the manager of the Oxford Electric Department.

Users can pay online either with bank account or credit card. Right now, about 12 percent of the city’s customers are using the new online service.

“The reaction has been overwhelmingly positive so far. Currently, over 1,600 customers use the online utility payment center,” said Neely. “Fifty-seven percent of the online customers used their credit card.”

But, not everyone thinks the new way to pay is a good deal.

“I noticed the small print that reads ‘an additional three percent charge will be added as transaction fee’ and I thought twice,” said Naohito Abe, who says he generally uses his credit card as much as he can. “I insist that they, the city, should try to improve the service.”

Mitch Wenger, an accounting professor at University of Mississippi, explains those transaction fees are what credit card companies charge every merchant.

“So every time you use a credit card at Walmart, at a restaurant, or anywhere, card companies charge that fee. Retailers include the fee into the price,” said Wenger.

He says customers typically pay the fees without realizing it, since private businesses adjust their pricing to pass on the credit card costs; however, public utilities cannot adjust their prices without approval from regulators, so it has to be a separate charge to users’ payments.

For some, like customer Guy Catelli, that additional cost is a deal breaker.

“They charged me $3; the stamp is cheaper,” said Catelli, who once paid a $100 electricity billing with a credit card, but now says he’ll go back to mailing a check every month.

Customers who don’t want to deal with writing out checks, buying stamps or getting to the mailbox on time can avoid the fees by allowing the city to draft their checking accounts, but it’s not for everyone.

“I don’t like automatic draft. They withdraw the money whenever they want to and you lose control,” said Wenger.
About 25 percent of Oxford’s electric customers use automatic drafts, but the most popular way to pay utility bills, so far, is by mailing checks— 41 percent of citizens still do it the old-fashioned way.

Tagged Mitch Wenger, Naohito Abe, Oxford, Oxford Electric Department, Rob Neely, Southern Studies