Banks Suspend Fees for Haiti Relief
Interchange fees suspended for donations to Haitian relief…
Banks and credit card companies make roughly $250 million annually through transaction costs on charitable donations, with a sharp increase when disaster strikes and humanitarian aid pours in. With contributions to the Haiti relief effort expected in the millions, banks and credit card companies stand to make a bundle from the generosity of Americans. But with growing criticism that credit card issuers are profiting from disaster, American Express, Visa, MasterCard and Discover are opting to forgo or donate their usual interchange fee (3-4%) for some donations made to the relief effort. Credit card companies have only been willing to waive their processing fee for charity once — for the 2004 tsunami disaster, according to Richard Walden, the chief executive of Operation USA.
More about the relief effort:
- Visa made a $200,000 contribution toward Haitian relief and is waiving interchange fees for donations to eleven charities, including the American Red Cross, Save the Children and Oxfam America, through February 2010. Visa will also donate all revenue generated from charitable contributions attributable to the crisis through the end of February.
- American Express made a $250,000 donation to groups providing Haiti relief, including American Red Cross, Doctors without Borders, International Rescue Committee and the United Nations’ Friends of the World Food program. American Express said it would “rebate the merchant discount rate for charitable contributions” made on its credit card directly to approved non-profit organizations listed on the U.S. Agency for International Development website that support Haiti relief efforts. Rebate to designated charities was retroactive to Jan. 12 and would continue through Feb. 28.
- MasterCard has given $250,000 toward the relief effort and is waiving fees to seven charity groups that are helping earthquake victims, including the Red Cross, Save the Children, the United Way and Doctors Without Borders.
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