Hassan Tyler is an analyst for the Washington consulting firm Capital Policy Analytics, which writes on behalf of businesses and trade associations. He’s also a former Senate staff member.

As Hurricanes Helene and Milton have shown us, in times of crisis, Americans are quick to step up and help those in need. In the aftermath of these storms, people across the country have rallied, donating money, medical supplies and non-perishable goods to support recovery efforts.

Charitable giving is a way for Americans to connect to their community and give back to the world around them in a positive and meaningful way.  

In fact, about 60% of American households give to nonprofits and charitable organizations every year, with individuals donating a total of almost $320 billion in 2023.  

Many Americans may be disappointed to learn that some of their contribution is being siphoned away from the good cause they chose and into the pockets of Visa, Mastercard, and big banks. When donating by credit card, a portion of the donation is lost to transaction fees such as swipe fees — meaning that the more than half of charitable donors who donate by card end up giving less than they intend to. 

It is important that Congress take action to fix this problem. The bipartisan Credit Card Competition Act would help break up the Visa-Mastercard stranglehold on credit card processing and curb the swipe fees nonprofits and charitable organizations must pay every time someone uses their credit card to make a donation.  

Accepting electronic and online payments by credit card is a vital source of donations to charitable organizations, because 63% of donors prefer giving online by credit or debit card. Unfortunately, just as a merchant is charged a swipe fee every time a customer uses a credit card to buy something, nonprofits and charities must also pay a swipe fee every time a donor uses their credit card to make a contribution. 

The loss of a few dollars to a swipe fee in a single transaction may not seem consequential, but on larger donations or during critical times — like the aftermath of Milton and Helene — when the number of donations quickly increases, these losses add up fast. With every dollar a swipe fee takes out of a donation, less good is accomplished in our communities.

All of this comes at a time when Visa and Mastercard and big banks like JPMorgan Chase and Citigroup have all reported significant profit increases, with credit card processing fees a driver of these profits. In 2023, credit and debit card processing fees rose up to $172 billion.  

Meanwhile, 92% of charitable organizations operate on a budget of less than $1 million a year and must carefully allocate donations while also keeping their own doors open. Nonprofits and charities need every penny they can get to make effective change in times of crisis, yet big banks and credit card companies continue to take their cut of donations made by Americans attempting to make a difference. 

As nonprofits and charities continue to do important work across the world helping those who need it most while operating on tight budgets, it is time for Congress to take action on the Credit Card Competition Act and start curbing credit card companies’ swipe fees.

We must protect the dollars Americans are generously giving and we should ensure that this money goes towards making the world a better place rather than boosting bank profits.