City halts use of credit cards at new meters

Boston's new multispace parking meters along Newbury Street stopped accepting credit and debit cards yesterday, as city officials acknowledged that their minimum payment requirement appeared to violate Visa and MasterCard regulations.

Thomas J. Tinlin , Boston's commissioner of transportation, said officials at Visa and MasterCard told the city it needed to review its policy of requiring drivers to purchase a minimum of two hours, or $2 worth of time, if they pay with a credit or a debit card.

"As a result, we are immediately discontinuing this payment option until further notice," Tinlin said in a statement.

The meters, along a four-block stretch of Newbury Street between Arlington and Exeter, will still accept quarters, dollar coins, and dollar bills.

Credit-card company rules prohibit merchants from requiring customers to make minimum payments when using credit or debit cards.

Tinlin said city officials were not aware of the rule until the Globe reported on it yesterday. "It has never come up," he said.

The meter's manufacturer is Parkeon, of Moorestown, N.J. The city uses Citizens Bank to process its credit card transactions. Neither company could be reached for comment last night.

Tinlin said he didn't know whether the city could afford to alter the meters to allow people to pay with credit or debit cards for whatever amount of time they want.

"It's good government that you want to cover your costs," he said. "With every transaction, there's a transaction fee."

Tinlin said he didn't know the size of the city's credit card transaction fee.

Mitchell Goldstone , a small-businessman from Irvine, Calif., who is the lead plaintiff in a lawsuit challenging the fees charged by credit card companies, said Boston could end up losing money if it lets people charge for whatever amount of time they want.

"If a motorist can park and run into a shop for five minutes and pay, say, a quarter on their credit card, the city is in trouble," he said. "They will be potentially paying more to Visa and MasterCard than they take in."

Since the city installed the 23 new pay-and-display meters Oct. 19, about 15 percent of the parking meter transactions have been with credit and debit cards, and the number had been growing.

City officials said they received few complaints and had high hopes of deploying more of the machines. Revenue from the machines, on a per-space basis, was up about 34 percent.

Under its contract with Parkeon, the city can purchase 1,000 meters over the next three years, with the first 25 costing $7,219 apiece and the remainder costing $10,000. The city collected a record $10 million from all parking meters last year.

Smaller merchants occasionally impose minimum-purchase requirements to avoid the fees they have to pay to process credit and debit card transactions.

Ann Johnson of Natick said she complained last year about two taxi companies that had such requirements. Natick town officials said Natick Cab and JFK Transportation ended the requirement after the town administrator contacted them.

Bruce Mohl can be reached at mohl@globe.com.