California wants to allow credit cards at the DMV, but it'll cost you a fee

Agency wants to pass on transaction costs to drivers, switch expected by October

Got a driver's license to renew or a vehicle to register? Well, if you were planning to pay for it with a credit card, you may want to do it this summer.

Under the new state budget, the Department of Motor Vehicles will be making an administrative change to pass credit card fees on to customers, a practice that typically adds 2% or 3% to the cost of a transaction. The switch, expected by October, means drivers will pick up $45.3 million a year in transaction fees currently absorbed by the department.

That cost is expected to grow to $71.8 million a year once the DMV adds field offices and expands self-service terminals. In a state with 27.1 million drivers, that works out to about $2.65 per driver.

DMV spokesman Jaime Garza confirms the change will be happening but says there's not a set date for the switch. Plus, it's unclear how much the fee will be.

"There are some technical requirements that are necessary to implement this process," Garza wrote in an email. "We will be communicating with the public after we have determined a date for the passing of the fee."

When Gavin Newsom released his goals at the beginning of the year, the new governor set his sights on improving the DMV. Newsom said he wanted to bring the department into the 21st century and singled out the DMV's inability to accept credit cards in the year 2019.

"You can't make that up," Newsom said during the release of his budget in January.

The switch is the result of a performance audit that looked for ways to improve operations and customer service. For years, the DMV has not charged a fee when customers use Visa, MasterCard, American Express or Discover to make online payments or at self-serve DMV Now kiosks.

But as the administration pushes the DMV to embrace technology and battle long wait times, it means adding the capacity to process credit cards at 172 offices — and passing the fees to customers.

While it may be cold comfort to consumers watching each penny, Department of Finance spokesman H.D. Palmer said it's common for government entities to pass transaction fees to consumers. A number of other state agencies such as the Franchise Tax Board, Department of Transportation and the Department of Consumer Affairs already charge credit card processing fees.

Of course, you can always avoid the fee by paying with cash, check, money order or debit card. is a nonprofit, nonpartisan media venture explaining California's policies and politics. Read more state news from CALmatters here.


Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

What is democracy worth to you?
Support local journalism.


17 people like this
Posted by Nayeli
a resident of Midtown
on Jul 13, 2019 at 11:48 am

Nayeli is a registered user.

I thought that the charge was already fixed within the cost of the DMV fees anyway. After all, our fees are already the highest in the nation.

13 people like this
Posted by resident
a resident of Downtown North
on Jul 13, 2019 at 12:04 pm

Question: when the DMV pays the credit card companies a 3% fee, how much of that is a real expense to the credit card companies and how much is a pure profit that they make because of price fixing? There are only 2 main credit card companies (Visa and MasterCard) so there is little incentive for them to compete on fees.

2 people like this
Posted by rsmithjr
a resident of Duveneck/St. Francis
on Jul 13, 2019 at 1:52 pm

rsmithjr is a registered user.


1. Will the DMV still accept other forms of payment, e.g., cash?
2. How will they account for the costs and inefficiencies of dealing with cash?

I have a general practice of paying with cash when fees are required for credit cards and see no reason for making an exception.

Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.


Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields

All your news. All in one place. Every day.

After 39 years of cakes and pastries, Palo Alto institution Prolific Oven to close
By Elena Kadvany | 55 comments | 17,541 views

Local Transit to the Rescue?
By Sherry Listgarten | 16 comments | 2,120 views

The Regional Housing Needs Allocation (RHNA) Process Explained
By Steve Levy | 9 comments | 1,526 views

"You Gotta Have Balls [to do counseling] . . .
By Chandrama Anderson | 0 comments | 1,297 views

Do something about assault weapons, now!
By Diana Diamond | 40 comments | 1,171 views


Register now!

​On Friday, October 11, join us at the Palo Alto Baylands for a 5K walk, 5K run, 10K run or half marathon! All proceeds benefit local nonprofits serving children and families.

More Info