WASHINGTON – Most consumers who pay federal taxes with debit cards this year will be charged less than in the past now that both of the companies authorized to process such payments are routing them as PIN-less debit transactions.
American Banker, an affiliate of the Credit Union Journal, reported that this tax season, Official Payments Corp. is matching the flat rate of $2.95 on debit transactions that Marshall & Ilsley Corp.'s Metavante Corp. introduced a year ago.
The change by Official Payments, a Reston, Va., unit of Tier Technologies Inc., sets the stage for a test of how much the 2.49% convenience fee both companies charge for credit and signature debit transactions has stifled demand. Before they adopted PIN-less debit, both processors accepted debit cards as signature debit transactions.
The convenience fee covers interchange fees and provides the companies a profit margin.
