N.J. Turnpike Authority has a $36 million gift for E-ZPass customers
Drivers in New Jersey who use E-ZPass and pay with a debit card or credit card are getting a $36 million gift from the Turnpike Authority and other toll agencies.
Commissioners of the toll agency that also runs the Garden State Parkway approved paying for three years of credit card processing fees instead of passing them on to drivers who use plastic to replenish or make one time E-ZPass payments.
“New Jersey E-ZPass has never charged people credit card fees,” said Tom Feeney, a Turnpike Authority spokesman. The Authority operates the state E-ZPass consortium. “The money will now be paid directly by the agencies in NJ E-ZPass, rather than paid through (contractor) Conduent.”
Turnpike commissioners voted Tuesday on the financing arrangement that pays a total of $150 million in fees over three years.
Roughly 90% of E-ZPass customers use debit or credit cards to pay, although a cash option still remains, said Donna Manuelli, chief financial officer.
“Two agreements obligate us to pay credit card fees,” she said. “The Authority’s share of these fees approximates $35 million per year.”
Average credit card processing fees across the industry range between 1.5% and 3.5%.
Some retailers have tried to force credit card companies and processors to roll back fees. Amazon threatened to drop Visa as its U.S.-based credit card after that company began charging fees of 1.5% of the transaction value in Britain and the European Union, according to Reuters.
Closer to home, the state Motor Vehicle Commission passed on credit card transaction fees to its customers, until Gov. Chris Christie ordered them to absorb the cost in 2016. When that order expired, the MVC resumed charging customers that fee in 2019 and it continues today..
“New Jersey E-ZPass agencies — like every other entity — pay a percentage of each credit card transaction to the credit card companies,” Feeney said.
What’s the rest of the money for? The New Jersey E-Z Pass group also needs cash on hand to pay other toll agencies when a driver with a Garden State E-ZPass account pays a toll on an out-of-state bridge or highway, Manuelli said.
“Since 1998, agencies agreed to reimburse each other, so when a New York Thruway (E-ZPass) customer (drives on) the Turnpike, we reimburse them (the Thruway) for that toll usage, that is $15 million a year,” she said. “We also receive money back when our customers use their road, which is $14 million.”
That transaction comes as officials said Turnpike traffic volume has increased by 14% and toll revenue was up 17% in the first three months of 2022, compared to the same time in 2021. Toll transactions, which is how the Garden State Parkway measures traffic, were up 9% and revenue increased 12% so far this year.
Turnpike traffic has recovered to 96% of pre-pandemic levels on the Turnpike and Parkway travel is at 94% of pre-COVID levels, Manuelli said.
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Larry Higgs may be reached at [email protected].
