Meters may break credit cards' rules

Boston's new high-tech parking meters may be running afoul of Visa and MasterCard rules that prohibit vendors from imposing minimum purchase requirements on their customers.

The new meters, which accept coins, dollar bills, and credit and debit cards, have signs on them stating that "the minimum charge for card payments will be two hours," or $2.

Visa and MasterCard rules prohibit merchants from requiring customers to make minimum purchases. Visa's rules, for example, state that merchants must accept a valid card regardless of the amount being charged.

"Imposing minimum or maximum purchase amounts is a violation," the rule states.

Randa Ghnaim , a spokeswoman for Visa, said violations of card rules are usually resolved in discussions between the merchant and the merchant's bank. "Most of the time it's a matter of education," she said.

Thomas J. Tinlin , the city's transportation commissioner, said he was not aware of the prohibition on minimum purchases .

His office later referred all questions to Vivian Leo , the city's first assistant collector-treasurer. She said she was awaiting a call back from Visa before commenting.

The Globe reported yesterday that the new meters, installed Oct. 19 in the Back Bay between Arlington and Exeter streets on Newbury Street, are generating 34 percent more money per space than their predecessors, and possibly much more.

City officials said the new meters generated $10.34 per space per day during the last half of October, a figure that increased to $11.16 per space per day during a spot check earlier this month. City officials say the meters are bringing in more revenue because they have been out of operation only 1 percent of the time, compared to 25 percent with the old meters.

But several drivers said revenue is also up because the machines require people paying with dollar bills and credit cards to buy a minimum amount of time and don't allow drivers to piggyback on the time left by previous parkers. Consumers paying with dollar bills are required to buy an hour's worth of time.

Daniel Hofmann , deputy director of Boston's Transportation Department, has said the city decided to require a two-hour purchase with credit cards because of the convenience offered and the fees involved in processing payments.

Retailers accepting credit card payments typically pay a percentage of the bill to their merchant bank for handling the transaction.

Ghnaim, the Visa spokeswoman , declined to comment, saying financial arrangements are negotiated between Visa-member banks and retailers. She noted, however, that Visa has instituted a number of programs to keep the cost of processing such small purchases as parking and tolls reasonable.

Jeff Conley , executive director of the Boston Finance Commission, a business-funded watchdog agency, said the meter time issued for credit card transactions could be changed by altering the internal software.

He said his chief concern with the new meters is their cost. Under the contract the city signed with the parking meter manufacturer, Parkeon, Boston can purchase a total of 1,000 meters over the next three years, with the first 25 costing $7,219 apiece and the remainder costing $10,000 apiece. Conley said the annual operating expense associated with each meter is $800.

Last year the city collected a record $10 million from all parking meters.

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