(AFP) – Jan 14, 2010
WASHINGTON — American Express and Visa on Thursday waived transaction fees for donations made via their credit cards to quake-hit Haiti amid criticism over profits by banks and credit card firms on contributions.
American Express said it would "rebate the merchant discount rate for charitable contributions" made on its credit card directly to approved non-profit organizations supporting Haiti relief efforts.
The organizations must be listed on the website of the US Agency for International Development (USAID), a company statement said.
The rebate was effective retroactively from January 12 through February 28, American Express said.
It announced a 250,000-dollar donation to assist several groups with their Haiti relief efforts, including American Red Cross, Doctors Without Borders, International Rescue Committee and the United Nations' Friends of the World Food program.
Visa said it "will not apply interchange" through February to donations made to a select group of major charities providing support to Haitian relief efforts.
"We will donate back any Visa revenue that is generated from charitable donations related to the crisis in Haiti through February, 2010," a company statement said.
Visa made a 200,000-dollar contribution to the Red Cross.
US banks and credit card companies make huge profits -- about 250 million dollars a year -- from people's charitable donations through transaction costs, an analysis by Huffington Post, a US news website, showed.
Those profits rise sharply after major disasters, when humanitarian relief organizations such as Oxfam and Operation USA take in more than 85 percent of their donations via credit card, it said.
The credit card providers, with only a few exceptions, refuse to waive their fees, the report said.
Credit card companies have only been willing to waive their processing fee for charity once -- for the 2004 tsunami disaster, said Richard Walden, the chief executive of Operation USA, according to the report.
Peter Larson of the Washington Humane Society, said: "It's unfortunate that a portion of our individual contributions are eaten up by processing fees, but that's the nature of business. We have no choice but to use credit cards because without them, we would lose a great deal of money in donations."
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