Payment Processing · Buyer guide
There is a genuine discount available to nonprofit organisations accepting card payments in the United States, it is larger than most fundraising advice suggests, and it does not come from your processor being generous. It is written into the card networks' own interchange schedules. Two things stand between a nonprofit and that rate: a merchant category code that many nonprofits do not have, and a pricing model that passes the discount through rather than keeping it.
Visa's U.S.A. Interchange Reimbursement Fees schedule, in the edition effective 18 April 2026, prices consumer credit charity transactions at 1.35% + $0.05. That is the rate whether the card is present or not, and — this is the striking part — it is the same on every card product tier, from the most basic card to Visa Infinite.
You qualify only if your merchant account is classified under merchant category code 8398, charitable and social service organisations. And you only see the benefit if you are on a pricing model that passes interchange through. On a flat rate, the network's discount goes to your processor, not to you.
The schedule sets out consumer credit interchange in two tables, card present and card not present, each broken across six card product columns: Visa Infinite Spend Qualified, Visa Infinite Spend Not Qualified, Visa Signature Preferred, Visa Signature, Traditional Rewards, and All Other Products.
Almost every program varies across those six columns, often steeply. The Services 2 program, card present, runs from 1.55% + $0.10 on All Other Products up to 2.30% + $0.10 on Visa Infinite Spend Qualified. Travel 2 runs 1.75% + $0.10 to 2.55% + $0.10.
The Charity rows do not vary at all. Charity 2, card present, is 1.35% + $0.05 in all six columns. Charity 1, card not present, is 1.35% + $0.05 in all six columns. Only Government behaves the same way, at 1.55% + $0.10.
For an ordinary merchant, the card a customer chooses is a cost you do not control. A donor paying with a premium rewards card is expensive precisely because the rewards are funded out of interchange. For a qualifying charity, that variable disappears: a Visa Infinite donation and a basic debit-tier credit donation cost the same 1.35% + $0.05.
That is worth more than the headline gap suggests, because donors skew toward premium cards. A nonprofit whose donors carry the same card mix as a typical retail customer base is avoiding the exact tier that would have hurt most. And it means a charity's effective rate is genuinely predictable in a way almost no other merchant's is — a real planning advantage, not just a cheaper number.
The downside protection is real too. The schedule prices Non-Qualified Consumer Credit at 3.15% + $0.10 across every tier, and that is what a transaction falling out of qualification costs.
This is the part that gets skipped. The charity interchange programs are tied to merchant category code 8398 — charitable and social service organisations — and not to your tax status. Being a registered 501(c)(3) is necessary but not sufficient.
Dharma Merchant Services, which publishes the qualification criteria for both networks' charity programs in unusual detail, states the restriction plainly: "Only Charitable and Social Service organizations are eligible (MCC 8398). Churches, schools, associations, and other nonprofits are not eligible for this rate category." That is a processor's reading rather than a network publication, but it is consistent with how the programs are structured and with the MCC definition itself.
If you run a church, an independent school, a membership association, a trade body or a foundation, the working assumption should be that you are not on the charity rate, and the first thing to establish is which MCC your merchant account actually carries. It is not something you can see on most statements, and you have to ask.
Visa's schedule also carries qualification conditions beyond the category. Charity transactions must be CPS qualified — authorised and settled within a day, with a single valid electronic authorisation, and for non-PIN debit the authorisation and settlement amounts must match. A transaction that misses those falls to a downgrade rate.
Mastercard operates equivalent charity programs against the same MCC 8398, but at materially higher rates. Mastercard's own current schedule is published only as a PDF that is not reliably retrievable, so the figures below are as published by Dharma Merchant Services rather than read from the network's own document, and should be treated as indicative:
Two things follow. Mastercard's charity credit rate is roughly 65 basis points above Visa's, so your blended cost depends on your donor card mix more than any single published figure suggests. And unlike Visa, Mastercard's charity rates do vary by tier — World Elite costs more. Do not model your fundraising costs on the Visa number alone.
This is the practical heart of it. Interchange is a wholesale cost your processor pays to the card-issuing bank. Interchange-plus pricing passes that cost through and adds a disclosed margin, so a fall in interchange reaches you. A flat rate does not change when interchange does. If your charity qualifies for 1.35% + $0.05 and your processor charges you a flat 2.9%, the network's discount improves your processor's margin and leaves your cost exactly where it was.
That is not an argument that flat-rate processors are behaving badly — a flat rate is a stated price and the simplicity has real value for a small organisation. It is an argument that the charity rate is a reason for a nonprofit to look harder at interchange-plus than a comparable small business would. Our guide to reading a merchant processing statement covers how to tell which model you are actually on, which is not always what you were sold.
Dharma Merchant Services publishes a nonprofit rate card: interchange and assessments at cost plus a margin of 0.10% + $0.08 per authorisation for storefront accounts and 0.10% + $0.11 for virtual, on $15 a month. That is a lower margin than its standard retail pricing of 0.15% + $0.08 on $20 a month. It also publishes the network charity qualification rules openly, which is rarer than it should be.
Helcim has no nonprofit-specific rate, but it is interchange-plus with no monthly fee, so the charity interchange reaches you in full. Its published margins start at 0.40% + 8¢ in person and 0.50% + 25¢ for keyed and online at up to $50,000 a month, falling as volume rises.
PayPal takes the opposite approach and discounts the flat rate directly. Its published fee schedule prices domestic transactions for confirmed 501(c)(3) charities at 1.99% plus a fixed fee of $0.49, against 2.99% + $0.49 for standard card payments and 3.49% + $0.49 for PayPal Checkout. Approval is required under PayPal's confirmed charity terms. For an organisation that cannot qualify for MCC 8398, this is one of the few routes to a lower rate that does not depend on the category code at all.
Stripe does operate a nonprofit discount, but it is neither published nor automatic. Stripe's support documentation says it "offers discounted processing fees for eligible nonprofit organizations that primarily accept donations," and sets a specific bar: "At least 80% of your Stripe payment volume comes from tax-deductible donations." Membership fees, tuition, ticket sales, registration fees and auction payments are all named as not counting toward that 80%. The discount amount is not disclosed and you apply through a form. Stripe's standard rates are 2.9% + $0.30 online and 2.7% + 5¢ in person.
Square has no nonprofit discount at all. A registered charity pays the same published rates as any other small business: 2.6% + 15¢ tapped, dipped or swiped on the free plan, 3.3% + 30¢ for Square Online and invoices, 2.9% + 30¢ through the Payments API, and 3.5% + 15¢ keyed. Claims that Square processes donations for nonprofits free of charge circulate widely and are not supported by Square's own fee page.
Payment Depot is worth a look for a nonprofit with steady volume for a structural reason rather than a charitable one: it charges interchange plus 0% and a flat per-transaction fee — $0.08 in person, $0.15 online — with no percentage markup. When the underlying interchange is already as low as 1.35%, a percentage margin on top is proportionally more of your total cost, so a zero-percent model compounds the charity discount rather than diluting it. Note the $10 a month PCI fee, which its $0 monthly headline does not include.
Interchange-plus totals below assume a qualifying Visa consumer credit charity transaction at 1.35% + $0.05, plus card association assessments of roughly 0.14% + $0.02 — the figure Dharma publishes — plus each provider's disclosed margin. Flat-rate totals are simply the published rate. Card-present and online are shown separately, because comparing one provider's in-person rate to another's online rate is the most common way these tables mislead.
Card present, $100 donation:
Online, $100 donation:
Read these as a demonstration of how much the pricing model matters, not as a league table. The interchange-plus figures depend on the transaction genuinely qualifying for the charity rate — if your MCC is wrong, every one of them rises by the difference between the charity program and whatever you are actually being priced at, and the flat-rate options become competitive again. Monthly fees also matter enormously at low volume: Dharma's $15 a month is $180 a year, which at these margins takes a good deal of donation volume to earn back.
Visa's schedule carves charities out of the card-not-present incentives that reward better data. EMV Token transactions, Digital Commerce Authentication Program transactions, and both together earn deductions of 0.05%, 0.10% and 0.15% respectively — but the schedule applies each of these "except for Charity 1 and CPS/Utility." A single exception is written back in: a Charity 1 DCAP transaction qualifies for the Type 1 incentive, minus 0.05%.
So a charity doing everything right online earns five basis points where an ordinary merchant doing the same earns fifteen. Charities start far enough ahead that this does not reverse the picture, but it is worth knowing before anyone builds a savings case on tokenisation.
The discount is real and it is substantial. It is also conditional in two ways that nobody is incentivised to explain to you, and both of them are answerable with a single email to your processor.
