CFPB Issues Report on Electronic Payment Costs in K-12 Schools

The CFPB recently published a report on its findings concerning the costs of electronic payment systems for school meals in K-12 public schools.  According to the CFPB, the report finds the following (among other items):

• Many school districts are contracting with payment processors to enable electronic payments for expenses such as school lunches.
• Within the sample tested, the CFPB identified that payment processors were charging fees of $2.37 per transaction or (separately) 4.4% of the transaction total on average each time money is added in to the payment account. 
• Families in the sample tested who were eligible for means-tested reduced lunch prices were paying between $0.08 and $0.60 in transaction fees for every $1 spent towards lunches.
• Approximately 67% of the students sampled were served by three payment processing companies (although the CFPB notes that more than 20 unique companies offer these services).
• Such payment processing structures may be a part of larger contracts for things such as back-end school nutrition or information management services.
• Families do not have a choice over which payment processing company they must use to add funds to their children’s lunch accounts at school.