The moves follow an analysis by the Huffington Post this week that credit card companies earn some $250 million a year from the donations aid groups solicit through their hotlines and websites, donations that typically spike follwing major disasters.
After the article was published, Senate Banking Committee Chairman Christopher Dodd issued a press release calling on credit card companies to "waive the transaction fees that prevent the full amount of charitable donations from reaching the intended recipients."
Whenever consumers use credit cards to make a purchase - or a charitable donation - the merchant must pay a fee of around 2% or 3% of the amount in various transaction fees. The largest, called interchange, is set by the card companies but goes back to the bank issuing the card.
American Express said it was waiving the processing fees for donations made to any nonprofit organizations listed on the USAID Website in support of Haiti relief – but only between Jan. 12 and the end of February
Visa said it would not apply interchange fees, through the end of February, to donations made to 11 charities contributing to the relief efforts. It will also donate revenues generated by contributions to these charities directly to the American Red Cross.
MasterCard said it would waive interchange fees on Haitian relief donations that are made using U.S. issued MasterCard cards to five charitable organizations.
Discover said it is waiving transaction fees on all credit card donations to the American Red Cross for an unspecified time.
Credit card companies rarely waive transaction fees on charitable donations. Visa did so following the tsunami in 2004 and again following Hurricane Katrina in 2005.
The political organization MoveOn.org criticizes the response to the crisis in Haiti as inadequate. “Many emergency donations to Haiti will still get hit with hefty bank fees,” the organization said in an email to members. It noted that Doctors Without Borders isn’t on either American Express or Visa’s list of charities that won’t be charged fees.
MoveOn.org is asking members to sign a petition to CEOs of the major card companies demanding they waive their processing fees on all charitable donations, not just on those destined for Haiti.