Online Resources Corp.'s efforts to encourage payment card acceptance by utilities are beginning to receive the backing of other card brands after its initial success with MasterCard Inc.

Online Resources announced Oct. 5 that Visa Inc. also had signed on with its program to enable utility companies to pay lower merchant discount rates as long as they do not impose a convenience fee.

Participation is available through Online Resources' eCom Advantage program, which offers a suite of electronic billing services that includes payments, presentment and receivables. Water, sewer, electric, gas and other utility companies, either public or private, may use the lower-cost program.

For the past four years, Online Resources has been involved in the MasterCard Utility Industry Program by offering utility companies a lower rate if customers pay using their MasterCards. Because not all consumers use MasterCards, Online Resources decided to use Visa's utility program as well, Bill Kinnelly, the Chantilly, Va., company's senior vice president of product and marketing of e-commerce services, said in an interview Wednesday.

Now Online Resources' participating utilities may reach out to Visa cardholders, "serving about 60% of their customer base, as about 60% of consumers have a Visa card," Kinnelly said.

Visa has been working to expand card acceptance at utility companies for many years, a company spokeswoman said in an e-mail, and more than 1,000 U.S. utilities accept Visa for bill payment. Regardless of the bill amount, the Visa Utility Program includes lower-cost interchange rates for qualified consumer and business debit and credit transactions, she said.

Through Online Resources, utilities can reduce what they pay for a card payment from about 2% of the bill amount to 75 cents for consumer payments and $1.50 for business payments, Kinnelly said.

On average, for a $200 bill a utility company can save about 80% on processing fees, Kinnelly said, citing data Visa provided and the company's own transaction data.

Utilities also are able to choose which payment channels to apply the discounts, especially if they prefer to collect payments through one outlet over another, Kinnelly said. A utility may charge a service fee for typical walk-in or over-the-phone payments, but will waive the fee when customers pay with a Visa card, he said.

Efforts to reduce how much utilities pay to accept credit card payments have existed for several years.

They are designed not only to help consumers and utility companies save money, but also to help encourage the use of networks' branded cards, said Adil Moussa, an analyst at Aite Group LLC.

"If consumers use a specific card on a monthly basis, research shows consumers are more likely to keep using that card for other purchases and will not end up switching to another brand," he said.

Utility companies also benefit because of the guaranteed monthly payment, Moussa said.

Indeed, not only are lower-cost payment programs a money-saving benefit for utilities and consumers, but they help "build loyalty for the networks and issuers behind the specific card, as the goal is to push consumers into the habit of using their credit or debit cards as a reoccurring payment," he said.

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