Using credit cards wisely

Seattle has launched a three-year program to replace 9,000 single-space, coin-operated parking meters with up to 1,600 multi-space, pay-and-display parking terminals that accept coins and credit cards. Since the first machines were installed in April 2004, credit card payments have accounted for half of the 2.5 million transactions and more than half of total parking revenue.

The Seattle Department of Transportation began searching for a new type of parking meter in 2003 after the manufacturer of the city’s mechanical meters discontinued the model’s spare parts supply. The city also was considering raising the $1 per hour parking rate, which had remained steady for more than 10 years. However, to accommodate a fee increase, the city would have to rebuild the machines, and additional coins would increase wear and tear on the meters, requiring greater maintenance.

The department decided to replace most of the city’s parking meters, the oldest of which had been used for 18 years, with a centrally monitored system that could accept coin and credit card payments. The system, provided by Moorestown, N.J.-based Parkeon, features solar-powered terminals that are connected by a wireless network and monitored by the company. Each terminal includes software that records financial and statistical data and sends that information using a modem over the wireless network to personal computers in the company’s offices. When coins need to be collected or terminals require maintenance, the terminals send alarms to the central office.

Each terminal generates an audit trail to record the money collected and the number and denomination of all coins, the value of each credit card transaction and types of cards used. City personnel can view the data on a password-protected Web site to track usage, and serv-ice and maintenance calls.

The new terminals are placed 75 feet or less — or three car lengths — from the parking spaces. Drivers choose the amount of time they want to park, pay in advance and place a receipt with an expiration time stamp in their curbside window. Credit card payments are authorized and processed through Bristol, Great Britain-based CreditCall Communications’ CardEase secure payment service, and funds are deposited directly into the city’s account every day.

The first new machines were installed in Pioneer Square and downtown, and parking rates have increased to $1.50 per hour. To date, multi-space terminals have been installed in more than one dozen neighborhoods, and about 20 neighborhoods will have them by the end of 2007. In areas that have the new terminals, per space parking revenue has increased by 40 percent, compared to that generated by traditional meters at the same rate. The numerical split between coin and credit card transactions is virtually 50/50, but revenue collected from credit cards represents approximately 62 percent of the total. The system currently processes an average of 11 card transactions per minute. In April 2005, the 645 terminals then installed generated $700,000 in one month. On average, 10 new machines are commissioned every week.

Because payments made using plastic are classified as “card present” transactions, the city does not incur losses in the event of card fraud. Similarly, the risks of identity theft — together with Seattle’s corresponding liability — are minimized by using online authorizations and keeping credit card data off the city’s computer systems. The volume of coins that has to be collected, counted and deposited is reduced significantly, which also cuts the opportunities for theft.

The centralized management system provides comprehensive data, such as occupancy rates and revenues, about every terminal, and Seattle officials can download the data in Web-based reports. Operators can use the information to help monitor, plan and develop the city’s on-street parking facilities, which will include a total of nearly 11,000 on-street parking spaces once 1,800 free parking spaces are converted to paid spaces over the next two years. The city received an Award of Merit this year from the Fredericksburg, Va.-based International Parking Institute for its new parking operation.