The Salvation Army is accepting credit and debit cards for contributions this holiday season in more regions nationwide. News articles from around the country have reported on the card terminals at the traditionally all cash "Red Kettles" which collect donations to support programs such as food for the homeless and toys for needy children.

The Salvation Army is smart to provider donors with the convenience of more payment options including Visa, MasterCard and American Express card transactions. Realizing that many people don't carry cash, the Salvation Army kettles are adjusting to the changing payment choices consumers are making.

The Salvation Army has deployed card acceptance to:

• Increase overall red kettle donations
• Eliminate "not carrying any cash" as an excuse for not giving
• Make it easy for people to make larger donations
• Provide a receipt for tax-savvy givers to apply for deductions
• Appeal to the next generation of younger donors
• Reduce cash and the risk of being targets of thief

To accomplish this, the Salvation Army divisions deployed hundreds of wireless payment terminals. Different regions selected different vendors. Some chose First Data's FD400 while others used the VeriFone VX610 wireless terminals. The Salvation Army reported that their rates were “very discounted”. But according to the quoted rates in an article by Payment Source, it appeared to be your basic qualified rate-as-low-as quote: “1.79% of the donation amount plus 20 cents when donors use credit cards”. Of course those of us talking to merchants every day about Interchange know that this type of blended rate quote is loaded with non-qualified surcharges for rewards and business cards. And depending on the market share of Visa check cards for example, even this “qualified rate” may be higher than it should.

Other issues come to mind as well. While not discussed, activating SIM chips for wireless coverage for a 30-day seasonal fundraiser adds unnecessary processing expense. Store and forward batch authorizations would reduce both set up and per transaction costs since real time approval codes are not necessary in this environment given there is no associated risk from declines. PIN debit requires real time approval but with an average ticket of only $14, they should reconsider adding the costs of encrypting devices to accept PIN transactions since the average ticket is below the signature debit break-even amount anyway.

Last, KAIT 8 Jonesboro AR reported that the kettles accepting Visa, MasterCard and Discover require a $5 dollar minimum donation. This of course is against the card acceptance regulations and they should be advised of such.