Verizon Reverses Decision to Charge $2 Fee for Web/Phone Payments

Verizon changed its mind on the "convenience fee" after customers spoke up against it.

Friday, Verizon Wireless reversed a decision it made earlier this week to start charging $2 for every payment subscribers make over the phone or online with their credit cards.

"The company made the decision in response to customer feedback about the plan, which was designed to improve the efficiency of those transactions," Verizon said in a statement. "The company continues to encourage customers to take advantage of the numerous simple and convenient payment methods it provides."

The company originally said the $2 "convenience fee" would be introduced on Jan. 15. It would not have applied to electronic check payments or to automatic credit card payments set up through Verizon's AutoPay system. Paying by credit card in a Verizon store would have also been free, along with mailing a check.

Verizon is the country's largest cell phone company. Earlier this month, there was even talk of Verizon being very interested in buying out Los Gatos-based Netflix; instantly adding 23 million customers to its market share. Bloomberg reports that Porter Bibb, managing partner at Mediatech Capital, says people within Verizon are "very serious about either Netflix or something similar."

Other carriers have tried to get subscribers to move to automatic payments through other means. AT&T Inc. offers a $10 gift card for those who set up AutoPay. Sprint Nextel Corp. charges subscribers who have caps on the fees they can rack up each month. Those people are charged $5 monthly unless they set up automatic payments.

It's not uncommon for utilities, universities and even state tax departments to charge convenience fees for online payments. Each credit-card payment comes with fees that the companies can avoid by getting electronic checks instead. Automatic payments mean less trouble for companies in going after late payments.

Verizon Communications Inc., the landline phone company that owns most of Verizon Wireless, tried last year to introduce a $3.50 fee for people who paid their bill for FiOS TV or Internet service month-to-month by credit card. It backed off after complaints.

Verizon Wireless serves 91 million phones and other devices on accounts that pay the company directly, and more who pay indirectly through other companies.

The Associated Press contributed to this report.

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