Update On Merchant Fees For Haiti Releif

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Last Thursday, it was my sad duty to report that credit card companies had not, at that time, chose to waive credit card interchange fees for donations for the Haiti disaster. In effect, they were skimming 2-3% off of the donations, a really despicable concept.

There was, in fact, a precedent set five years ago when they suspended processing fees for donations to non-governmental organizations (NGOs) in the wake of the Pacific Tsunami.

Credit Cards Finally Step Up To The Plate, Sorta

Late Thursday, word came out that merchants had finally agreed to suspend credit card fees, in line with the precedent set after the Tsunami.

Visa Does The Right Thing, Temporarily

While that is good news, leave it to credit card companies and banks to hide the downsides in the small print:

“In a statement, Visa said it would not apply interchange fees, through February, to donations made to a select group of major charities — the names of which were still being compiled — that are providing support to Haitian relief efforts. The company said it would also donate any revenue that was generated by charitable donations related to the Haiti crisis through next month.”

So even though it will take years to rebuild Haiti, only donations during the first 6 weeks of the disaster will have interchange fees waived.   After that, it is back to skimming from the pot….Great!

Mastercard Minimalism

Mastercard also agreed to waive it’s fees, but like Visa it left some serious loopholes:

“MasterCard Worldwide said it would waive interchange fees on relief donations made using United States-issued MasterCards to the American Red Cross, AmeriCares, Unicef, Save the Children and CARE U.S.A.”

Frankly, that is a pretty small list.   For example, the Clinton Bush Haiti Fund is not even on there.   Here is a list in the New York Times of 10 reputable funds that are delivering aid to Haiti.   The five funds Mastercard is exempting are there, plus Convoy of Hope, Direct Relief International, Doctors Without Borders, Partners in Health, and Water Missions International.   Mastercard is continuing to skim the pot from those and other charities.   FOR SHAME!

Other Problems With Credit Card Donations

It typically takes a month or two for donated monies to reach recipients.  I am not an expert in this matter, so I don’t know if charities are able to receive some portion of the funds or not, or how much aid is held up because of this.    Either way, it seems as if this might be one situation where a check would be more effective than a credit card.

In The Future

The hopelessness of the situation in Haiti is truly depressing, yet perhaps some positive changes can come out of this situation.    My wish is that all of the major credit card processors, Visa, Mastercard, American Express, and Discover, can come to some agreement to waive all interchange fees for charitable relief organizations in the future.    It should not take a monumental disaster for these companies to do the right thing, albeit in a limited and/or temporary way.

My hope would be that they would both waive interchange fees and match with a donation of whatever cash back or points that the card would normally accrue.     Based on their behavior so far, I am not holding my breath.

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