Verizon adds $2 convenience fee for online payments

File this in the “what were they thinking” bucket. Droid-Life is reporting that Verizon has decided to add an extra $2 per month fee to users who pay their monthly bill online or by telephone. The fee is applicable when making a payment via the website, but will be waived if a customer enrolls in automatic bill pay or uses an electronic check.

You’d think that Verizon would have done some homework before making this announcement. Customers do not like price increases, as evidenced by the Netflix price hike earlier this year. At the same time, companies have been pushing people to pay their bills online for years. The infrastructure to handle these payments is already in place and this is clearly just a ploy to convince customers to setup recurring automated payments so that Verizon can ensure that they receive their monthly payments.

To make things even more embarrassing for the company, yesterday Verizon experienced their third wireless data outage in December. Despite claiming to be the nation’s most reliable wireless network, many customers have been unable to use their 3G and 4G data plans so the timing of the fee increase is very puzzling.

Will you consider switching providers based on this news, or has Verizon given customers enough options to be able to avoid the extra convenience fee that it’s not really a big issue?

Image courtesy of Droid-Life.com

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Does this change your contract? Can we get out of our contract? I hate Verizon and I'm looking for an excuse to get out of it.

Wait, so Verizon is charging us $2 for giving them money or for not using a teller on the phone or using USPS (and have them spend money on envelopes and postage?

It's just one more way for Verizon to screw over the customers. Like every big business does, and Verizon has in the past.

Although it's not ideal you could always game the system and set up auto pay a week or so before the due date (or whatever the minimum amount of time is to set it up for payment) and then cancel auto pay. Avoid the $2 fee, but it really doesn't accomplish much and might be more headache than it's worth.

warwagon said,
Everyone here does realize Verizon has to give a % of your bill payment to the CC companies to cover your CC transaction right?

Skwerl said,

No, it's not. It's clearly a way to receop credit card fees.

It's always been this way.. it's nothing new.. so now all of a sudden it's such a problem that they need to apply this fee? Come on.. it's pure corporate greed. The percentage will depend on a lot of factors, which payment processor they use, etc.. but card transactions are around 25 cents. It's a ploy to get you to give them a CC # to use at any time they want to avoid another fee.

Verizon doesn't gain anything related to the processing fees just because you have auto pay set up, it's not like they won't still have to pay any fees associated. It's a pure cash grab from people who want to control when their payment is applied rather than let Verizon do it for them, whenever Verizon wants to.

I don't get this.

By eliminating the manual processing aspect, they save more than $2.
So why abuse your customers as they are saving your company money?

Its too convenient for you to choose when you pay.
We will waive the fee if you provide your credit card to us.

Which is more 'convenient"? Not having to read your bill and make a manual payment, or letting the company process what it wants from you when it wants to without your say or opinion?

I smell a lawsuit coming over this....

It looks like Verizon loves to lose customers. I don't want automatic draft, and I pay online manually every month. Lucky me, my contract with Verizon ends in two months, and my reception at home is absolute crap, so in two months I will be getting another carrier.

Verizon's $2 convenience fee has all the potential of backfiring on the scale of BofA's ill-conceived $5 debit card fee.

"Convenience fee" happens to be a technical term used in our industry (see http://blog.unibulmerchantserv...redit-card-convenience-fees), which designates a surcharge that merchants offering an "alternate" payment channel (e.g. mail, telephone and e-commerce) are allowed to add to the transaction amount to offset the payment processing cost. This is why Verizon will not be charging the fee for bank card payments made in person.

So, even though payment card industry rules define it rather fuzzily, Verizon's $2 charge is technically legal. But that doesn't mean that the carrier's decision is smart. On the contrary, it is a real dumb move. Processing fees are a cost of doing business and should not be passed on to consumers. If you don't want to accept credit and debit cards, you don't have to, but if you decide to be doing it, you should be willing to pay for it. It is really that simple.

Everyone here does realize Verizon has to give a % of your bill payment to the CC companies to cover your CC transaction right?

warwagon said,
Everyone here does realize Verizon has to give a % of your bill payment to the CC companies to cover your CC transaction right?

So that makes it OK then?

emgben said,
So that makes it OK then?

Pretty much. You use the convenience of a credit card, and they lose a % of the bill be cause of it. So they are trying to recoup the loss.

WTF are they thinking??! Only reason I won't do auto pay is cause they screw my bill up every other sunday!!! I have to watch it and check it good before paying cause its never a cycle goes by something is wrong and I can't sit here and let them take money from me for something they screw up! This is beyond ignorant!

Edit: I just sent them a nice nasty email about this and flat out said if they do it I'm going to consider moving to another provider and telling others I know that use their service about this stupid fee and to move also!

Edited by sava700, Dec 29 2011, 9:35pm :

I've started telling everyone I can about this and to NOT sign up with them. I've also already my local news channels as they also covered the banks when the did this. We all need to spread the word as best we can. If they see enough money being lost, then maybe they will pay attention to their customers, like they should be doing anyway.

Banks lost me when they did this, and now Verizon is losing me. As the consumers, we have the power because we have the money they need. If we don't buy the product, then they listen. Boycott works. Always has.

Ah yes poor rich Verizon has so much problems with income that they must charge 2.00 for online pay cause papa needs a new yaht.

TBH, I never understood how companies could consider charging 2, 5, 10, whatever and call it a convenience fee. I know a lot of ticket companies do this too, If anything, it's more convenient for them, instead of having to pay postage or what not to mail you the tickets, you can print it yourself, SAVING them money.

Either way, it's a total grab at trying to get as much money they can from customers, which in turn ends up pushing them away.

Dish network does the same thing...they'll charge you an extra fee if you do NOT have your receiver connected to a phone line.

I think for the sake of our country, every single american should stop using our cell phones and bring these companies to their knees. Im sick of being a victim of capitalism. We don't need terrorists to threaten us, we are going to collapse from the inside out.

Well that fee will be paid for when I start charging them a "$20 per month customer convenience fee." Im going to start imposing this fee as it is convenient for Verizon to have me as a paying customer.

manwiththedroid said,
Well that fee will be paid for when I start charging them a "$20 per month customer convenience fee." Im going to start imposing this fee as it is convenient for Verizon to have me as a paying customer.

LOL

manwiththedroid said,
Well that fee will be paid for when I start charging them a "$20 per month customer convenience fee." Im going to start imposing this fee as it is convenient for Verizon to have me as a paying customer.

I was going to say something similar except along the lines of paying $2 less on my Verizon bill every month as a convenience to cover the fee.

margrave said,
When my contract with Verizon ends, I'm leaving them. This is nothing short of pure BS!

ok, where you going to go? other carriers are going to do something similar in the future also, Comcast (cable company) is starting something similar, Time Warner has something similar, AT&T is working on a similar plan....

This is just another hidden fee no matter how you put it. Instead of a price increase they simply add some new fee for whatever they can think of, this way they the increase is for all their customers, including the ones protected by a contract.

There was an article in the local paper where a woman's Verizon contract was about to be up, so she switched her number over to her new provider a week early yet still paid her Verizon bills. Verizon said this was breach of contract and without asking, because she had set up autopay, they took the last months bill and a $200 "early cancellation" fee for each phone on the account out of her bank account. Because apparently you authorize them to do things like that when you set up auto-pay.

Since then I've refused to use Auto-Pay and I just make a payment when they send me an email about my payment being due. I'll live with the $2 fee, because it's better than any of the alternatives, but I won't enjoy it.

Amarok said,
There was an article in the local paper where a woman's Verizon contract was about to be up, so she switched her number over to her new provider a week early yet still paid her Verizon bills. Verizon said this was breach of contract and without asking, because she had set up autopay, they took the last months bill and a $200 "early cancellation" fee for each phone on the account out of her bank account. Because apparently you authorize them to do things like that when you set up auto-pay.

Since then I've refused to use Auto-Pay and I just make a payment when they send me an email about my payment being due. I'll live with the $2 fee, because it's better than any of the alternatives, but I won't enjoy it.

So she broke contract a week early and they nailed her with the $200 fee? So basically the moral of the story is, if she hadn't been on autopay she could have ****ed them over by breaking her contract a week early and refusing to pay the $200. but instead because she was on autopay, Verizon didn't get screwed over and actually got their money out of her?

warwagon said,

So she broke contract a week early and they nailed her with the $200 fee? So basically the moral of the story is, if she hadn't been on autopay she could have ****ed them over by breaking her contract a week early and refusing to pay the $200. but instead because she was on autopay, Verizon didn't get screwed over and actually got their money out of her?

READ. He said "switcheda week early but still paid the bill." How was verizon owed anything if she still paid up the end of her contract?

I don't think Verizon is at in the wrong for this. I would blame the credit card companies. Verizon or any other business gets charged a % of the amount paid with a credit card. So you give pay them with a credit card for X amount and just for them processing your credit card the credit card company charges them X amount. So I would assume the $2 is only to cover the processing charge.

Personally I would love to except credit cards for my business. But on a $53.50 payment the processing fee was 1.6% i would have to pay on a 53.50 translation.

Just the other day as I was paying my Verizon bill online, I thought to myself "Wow, this is really convenient, I should be paying a fee for this. It's not like pretty much every other company I do business with allows me to pay online for free or anything."

"...this is clearly just a ploy to convince customers to setup recurring automated payments so that Verizon can ensure that they receive their monthly payments."

No, it's not. It's clearly a way to receop credit card fees. Every time you swipe your card, the merchant pays a flat fee (say $0.25) plus a percentage of the charge, which is usually 2-3%. That's why places don't like running thing through credit cards. They lose some of their payment to the card companies and processors.

Skwerl said,
"...this is clearly just a ploy to convince customers to setup recurring automated payments so that Verizon can ensure that they receive their monthly payments."

No, it's not. It's clearly a way to receop credit card fees. Every time you swipe your card, the merchant pays a flat fee (say $0.25) plus a percentage of the charge, which is usually 2-3%. That's why places don't like running thing through credit cards. They lose some of their payment to the card companies and processors.

you honestly think the prices weren't already bumped up to account for these fees? Everytime you buy something you are already paying the expected 3% surcharge. If you pay by cash, they just pocket the additional profits.

It'll be interesting to see how far they actually get with this, from a civil-legal perspective.

There's kinda a chain reaction that occurs when it comes to credit card processors. The merchant agreements for MasterCard, Discover, and American Express all say that you can not make their card more expensive to use than another card (for example, a merchant cannot charge a fee to AmEx users, but not Discover users).

Visa goes a step further - their merchant agreement prohibits merchants from making Visa more expensive than ANY payment method, including cash, check, and direct transfer. So companies who accept visa cannot charge a credit card processing fee at all (which is why some smaller companies and government organizations don't accept Visa - so they can charge a fee on the other three major cards).

This fee seems to be directly targeting non-automatically-recurring credit card payments, so it is essentially a fee on paying by credit cards. It'll be very interesting to see what Visa will have to say about this in the long run.

Joey H said,
It'll be interesting to see how far they actually get with this, from a civil-legal perspective.
Visa goes a step further - their merchant agreement prohibits merchants from making Visa more expensive than ANY payment method, including cash, check, and direct transfer. So companies who accept visa cannot charge a credit card processing fee at all (which is why some smaller companies and government organizations don't accept Visa - so they can charge a fee on the other three major cards).

The Dodd-Frank CP Act actually prohibits such clauses now.

http://en.wikipedia.org/wiki/D...and_Consumer_Protection_Act

The bill aimed to restrict anti-competitive practices and encourage competition, and included provisions which allow retailers to refuse to use cards for small purchases and offer incentives for using cash or another type of card.[14]

Just as convenient for me to turn paper billing back on and setup the bill pay on my bank along with all my other bills. I already get that as a service through the bank so I'm saving over $37 over the contract period.

They basically do this so they don't have to advertise that the cost of the plans are more than AT&Ts. Pretty dishonest.

DirecTV does something similar, but in their case if you setup automatic payments you don't have to pay the $5/month HD access fee. The HD access fee is bull**** anyway. Its practically 2012. HD = standard these days.

Yet another way to bend over your customer base and find a way to squeeze some more money out of them. Banks and credit card companies are no different.

this is the start of a bad trend...... sales companies trying to pass on their credit card processing fees to the consumer..... just this past weekend we went to buy some new furniture, the lady told us "you get a 10% discount if you pay in cash" ugh...

I always thought and still think cable/phone/power companies change you $150+ a month for services then changing you to pay it is dumb. It's just bad business to do it in my eyes.

Companies just don't want to deal with the people they serve. I pay all my bills but for rent by online bill pay through my bank. Rent still requires a check or money order. So only check I write is for rent.

What does all that "banking reform" legislation cost?
The fees that used to get absorbed in to operating-cost line items aren't getting absorbed anymore and the consumer is actually starting to see what it costs to do business.
As someone who does on occasion accept a credit card payment, I'm glad to see this happen. People need to know that it costs lots of money to process this stuff. If it seems unreasonable to have to pay for the convenience of using a credit/debit card, just exactly who should pay for it? If it's too much, write a check and put a first class stamp on an envelope and address it to where it needs to go and wait a week for it to get delivered and processed and 2 weeks to clear the bank on both ends. Problem solved. Either way, it's going to cost somebody something. Service providers either have to raise rates or charge for a specific service, and it is a service.
America needs to get over this entitlement mentality. And no, the customer is not always right.

Virtual TWiT said,
What does all that "banking reform" legislation cost?
The fees that used to get absorbed in to operating-cost line items aren't getting absorbed anymore and the consumer is actually starting to see what it costs to do business.
As someone who does on occasion accept a credit card payment, I'm glad to see this happen. People need to know that it costs lots of money to process this stuff. If it seems unreasonable to have to pay for the convenience of using a credit/debit card, just exactly who should pay for it? If it's too much, write a check and put a first class stamp on an envelope and address it to where it needs to go and wait a week for it to get delivered and processed and 2 weeks to clear the bank on both ends. Problem solved. Either way, it's going to cost somebody something. Service providers either have to raise rates or charge for a specific service, and it is a service.
America needs to get over this entitlement mentality. And no, the customer is not always right.

Cicero pro domo sua

If you are in business and accept credit cards payment YOU add the transaction fees to the cost of running YOUR business; sure you can try to pass it on customers but when they go somewhere else YOU will loose business.

And customers are tired to be ripped off by companies charging more and more and offering less and less.

Virtual TWiT said,
What does all that "banking reform" legislation cost?
The fees that used to get absorbed in to operating-cost line items aren't getting absorbed anymore and the consumer is actually starting to see what it costs to do business.
As someone who does on occasion accept a credit card payment, I'm glad to see this happen. People need to know that it costs lots of money to process this stuff. If it seems unreasonable to have to pay for the convenience of using a credit/debit card, just exactly who should pay for it? If it's too much, write a check and put a first class stamp on an envelope and address it to where it needs to go and wait a week for it to get delivered and processed and 2 weeks to clear the bank on both ends. Problem solved. Either way, it's going to cost somebody something. Service providers either have to raise rates or charge for a specific service, and it is a service.
America needs to get over this entitlement mentality. And no, the customer is not always right.
Here is the problem with your thoughts. You are comparing buying something on location to paying for a service. Since cell providers are going this route, the best alternative will be to pay in person in cash. They cannot refuse cash in-store. The problem with this is that provider run stores are not as abundant as you may think. The good thing is, since this was not part of the original agreement, people have a right to cancel their contract because of this move. I hope they keep this stupid fee and put themselves in a position of being bought out. I think vzw customers should swarm retail verizon stores to pay their bills in person and show them who is being inconvenienced by this convenience fee. All the extra labor to take payments will drive them nuts.

Invizibleyez said,
Here is the problem with your thoughts. You are comparing buying something on location to paying for a service. Since cell providers are going this route, the best alternative will be to pay in person in cash. They cannot refuse cash in-store. The problem with this is that provider run stores are not as abundant as you may think. The good thing is, since this was not part of the original agreement, people have a right to cancel their contract because of this move. I hope they keep this stupid fee and put themselves in a position of being bought out. I think vzw customers should swarm retail verizon stores to pay their bills in person and show them who is being inconvenienced by this convenience fee. All the extra labor to take payments will drive them nuts.

The problem with this is some stores charge for paying in the store. I use Cricket Wireless, mainly because I don't need to have a contract. If I pay in-store or over the phone, there is a $3 convenience fee. Currently, there is no charge to pay with credit card online.

I'm so glad I have VM may not have latest kick ass phone but is not hurting my wallet. I'm done paying arm and leg services, and bs "fee". this fee are the processing fee Credit Card companies charge them so they want charge this fee to the customers ?

If it wasn't for grandfathered unlimited data, and company discount, I probably would be using another carrier like T-mo or ATT. It's ok, I'm going to save myself $2 (well $1.56), and just mail them the damn check. Mail every check for 24 months (2 yr. contract), and you will save $37.44, assuming the stamp price remains at $0.44 for the 2 year period.

tsupersonic said,
assuming the stamp price remains at $0.44 for the 2 year period.

Stamp prices are increasing to 45 cents on 1/22/12!

I am really not a fan of companies that try to take advantage of their customers like this. The cost of processing the transaction is a cost of doing business. It is not the consumer's responsibility to make this work and make it profitable, it is Verizon's... And with what they charge for their service, they have absolutely no excuse for not being able to make it profitable...

Haha.
Over my end, telcos (and most other companies) over the last few years have started charging increasingly big fees for sending and processing paper bills, citing promoting of environment saving, paper costs and processing time (because online systems cost nothing, right?). Interesting, if this will be just the first occurence of many that it was a big bull* and fees will be added anyway.

What is surprising is the amount of crap they send to post as marketing/advertising especially when you cancel a service. That must cost far more!! I get two a month from Sky (UK Broadband/TV subscription service) letting me know of the same 'great offer' they are trying to get me to sign on to yet they've suddenly started to charge for monthly statements through the post... Hmm

You think they would learn. Qwest tried this and faced such a huge backlash that they canceled it. It's not ok to have people pay fees to pay their bill. It's total BS.

I will just enter my bank info and pay by e-check. Kinda stupid tho since I would think it would cost them more printing out the bills and mailing them to customers.

techbeck said,
I will just enter my bank info and pay by e-check. Kinda stupid tho since I would think it would cost them more printing out the bills and mailing them to customers.

Umm...noooooo.. you have never used e-pay apparently.. you get NO paper using that method, you enroll using your bank, the bill comes to your bank asking for payment, you either accept or deny it, that's BILL pay or e-pay, no paper at all..

rijp said,

Umm...noooooo.. you have never used e-pay apparently.. you get NO paper using that method, you enroll using your bank, the bill comes to your bank asking for payment, you either accept or deny it, that's BILL pay or e-pay, no paper at all..

Thought it was just using your bank account/routing number to pay. Maybe I was was mistaken.

rijp said,

Umm...noooooo.. you have never used e-pay apparently.. you get NO paper using that method, you enroll using your bank, the bill comes to your bank asking for payment, you either accept or deny it, that's BILL pay or e-pay, no paper at all..

Actually, that's not exactly how it works. When you sign up for auto-pay you are authorizing an automatic debit from one of your bank accounts on a given day of the month. No bill is sent to your bank, but rather the e-check transaction you would have setup manually online happens without your intervention.

Glen said,

Actually, that's not exactly how it works. When you sign up for auto-pay you are authorizing an automatic debit from one of your bank accounts on a given day of the month. No bill is sent to your bank, but rather the e-check transaction you would have setup manually online happens without your intervention.

Autopay is not the same as e-ay or bill pay. Bill Pay is exactly what Rijp said. The bill is electronically added to your Web Bill Pay mailbox with your bank account. You go into the Bill Pay system and set up the day you want the payment posted. Depending on how your Bill Pay system works, the debit process may start a few days prior.

techbeck said,
I will just enter my bank info and pay by e-check. Kinda stupid tho since I would think it would cost them more printing out the bills and mailing them to customers.
rijp said,
Umm...noooooo.. you have never used e-pay apparently.. you get NO paper using that method, you enroll using your bank, the bill comes to your bank asking for payment, you either accept or deny it, that's BILL pay or e-pay, no paper at all..
techbeck said,
Thought it was just using your bank account/routing number to pay. Maybe I was was mistaken.


Depending on the site, both are right, excpet for the printed bill part. You can have your bill printed, but it's not necessary. Last time I used to have verizon, they had two options, Pay by Credit Card or Pay bay check...where you enter your routing number and checking account number...on verizon's site. The difference, if I remember correctly, Credit Card goes throught immediatly, check takes a couple of days. The only difference now is there is a convinence charge to have your payment made the same day.

As rijp mentioned, there is also the option to have your bills electronically sent to your bank web bill pay account, where you decide when to pay, or can set it up to go out automagically.

(I'm going by memory on the Verizon thing, it's been a couple of years since I actually had a Verizon account.)

This is no big deal. If you have auto pay setup or pay by check or pay at the store or pay via your bank, it doesn't affect you. This is only bad new for people that pay online without auto pay. I can live with that.

UndergroundWire said,
This is no big deal. If you have auto pay setup or pay by check or pay at the store or pay via your bank, it doesn't affect you. This is only bad new for people that pay online without auto pay. I can live with that.

So basically, you don't care because it doesn't affect you personally? OK then, but that's not very helpful to people in general.

UndergroundWire said,
This is no big deal. If you have auto pay setup or pay by check or pay at the store or pay via your bank, it doesn't affect you. This is only bad new for people that pay online without auto pay. I can live with that.

yeah agree with previous post, it doesn't affect YOU, but I don't WANT to use Autopay.. simply because vendors DO and HAVE made mistakes that COSTS me $$$, because they OVERBILL. Next time consider you AREN'T the ONLY person affected.. maybe some common sense will tell you what not EVERYONE can use Autopay either.. for different reasons.

Bottom line is $2.00 is RIDICULOUS..

Glad I have ATT!

3 Charisma said,

So basically, you don't care because it doesn't affect you personally? OK then, but that's not very helpful to people in general.

Actually I was helpful because I stated how you can avoid the charge.

READING COMPREHENSION FAIL!!!

UndergroundWire said,

Actually I was helpful because I stated how you can avoid the charge.

READING COMPREHENSION FAIL!!!


While at the same time stating, that because it doesn't affect you that it is completely ok to have this charge, hey tell ya what, when the gas companies are adding a 5$ Convenience Fee for have hoses on their pumps, I dare you to come up with some ways of avoiding that. Its the same deal.

SSCorporal said,

While at the same time stating, that because it doesn't affect you that it is completely ok to have this charge, hey tell ya what, when the gas companies are adding a 5$ Convenience Fee for have hoses on their pumps, I dare you to come up with some ways of avoiding that. Its the same deal.

That was such a bad analogy. There are more ways to pay your bill without getting charged the convince fee.

Your lame analogy shows no way of avoiding it short of not driving a vehicle or getting an electric car. What I was saying was there are more ways to avoid the fee. That was such a fail comment you made. Please, STAY QUIET!!!

This is such crap, basically it's a credit card fee and they are passing the processing charge on to consumers.

bdsams said,
This is such crap, basically it's a credit card fee and they are passing the processing charge on to consumers.

This is my thoughts. I wouldn't be surprised if the processing fee they have to pay has gone up, so it is being passed on to the consumer. I'm not saying this is right, but it is not the first and won't be the last.

I know that when I pay my electric bill online, If I pay with my credit card through the website, there is a $3 "convenience" fee. If I use an electronic check through "MyCheckFree", the payment is free. The difference? The Credit Card payment is usually credited the same day. (Sometimes next business day if it is after business hours). The electronic Check through MyCheckFree usually takes 2-3 days to post.

Tha Bloo Monkee said,
Inconvenience fee more like it.

Ohhhh I see what you did there!

and yeah it has always left me dumbfounded when companies decide to charge their customers to pay bills. I think if they HAVE to have it just try and pull the money from elsewhere but not like this.