Pass the Credit Card Competition Act and Stop Card Companies from Swiping Our Donations
David MacEachern
Senior Pastor of Grace Baptist Church in Gastonia
State and federal resources are often quick to help minimize the damage and rebuild after devastating natural disasters like Hurricane Helene. Many Americans also know that charities and nonprofit organizations like mine work tirelessly to help those impacted get back on their feet and fill the gaps both during and long after the event occurs. However, what many Americans don’t know is that massive financial institutions like Visa and Mastercard skim an average 1.5-3.5 percent off the top of every credit card donation we receive.
The credit card companies and banks who charge and collect ever increasing swipe fees siphon a portion of the generous donations that are given to us in good faith. But lawmakers can help reduce these fees by passing the Credit Card Competition Act (CCCA). This long overdue bill has the support of voters by a 50-point margin, and it’s critical Congress passes this bill before the end of the year to help stretch every dollar given to charitable organizations.
Credit cards have become the preferred payment method for many Americans, including when they make charitable donations. Unfortunately, whether you’re a small business owner or the head of a charity, every transaction incurs a swipe fee when someone uses a credit card, and those fees have gotten increasingly burdensome over the last several years thanks to Visa and Mastercard. These two companies hold a duopoly on the credit card payment industry as they control more than 80 percent of the market share, which has allowed them to raise swipe fees and eliminate pushback by boxing out potential competitors. Those who pay swipe fees forked over more than $224 billion in swipe fees last year, more than triple what they paid just a decade earlier.
Rising swipe fees often force business owners to raise prices to cover costs, further straining customers struggling under inflation. For nonprofits and charities, swipe fees cut directly into charitable donations, limiting the extent to which those organizations can carry out the mission those funds were intended to support. In North Carolina, fewer donations means fewer medical supplies, clothing, and food for those impacted by the hurricane that ravaged our state. While Visa and Mastercard have made a show of waiving some fees during past crises, it does little to change the heightened swipe fees that impact our fundraising efforts when we’re not actively assisting recovery efforts. Charities should not have to rely on credit card companies temporarily waiving their swipe fees to get the maximum amount from donations.
The CCCA is a commonsense, bipartisan bill that would allow those who accept credit card payments to choose between at least two network options when processing transactions. This would encourage Visa and Mastercard through competitive market pressure to lower their swipe fees to a reasonable rate and improve their services. Enabling alternative networks will also help build redundancies and backup systems for transaction processing so that if one network goes down, especially in times of crisis, the merchant or charity can still process a payment.
It’s time for this sensible bill to become law so charitable organizations are funded to the fullest extent and so donations of everyday Americans can have the greatest impact. With Congress back in session I hope Sens. Thom Tillis (R-NC) and Ted Budd (R-NC) will support the CCCA and push for a vote this year.
