Is donating to charity by debit card better than by either check or credit card?

Question

Many web sites say that is it better for a charity if you donate money to it by check or bank transfer than by credit card - at least for larger donations - because the former methods have lower processing fees: see here, here, here, here, and this question on Money SE. Of course, there are some practical costs to dealing with checks for both the donor and the recipient (postage, deposit, etc.).

However, none of the sites that I found discuss in any detail the pros or cons of donating by debit card instead. According to here, here, and here, debit card transactions usually have much lower fees than credit card transactions.

Does that mean that a donation via debit card would be the best of both worlds, combining the low fees of a check with the convenience of a credit card transaction? Or, if the fees for a debit card transaction are still higher than for a check, does the debit card option at least strictly dominate the credit card option? It's odd to me that so many sites (including the other Money SE question) only consider the options of credit card and check/bank transfer, without even mentioning the debit card option.

Answer 1

In the US

• A regulated debit card (mid to large banks) has a maximum transaction fee of 21 cents plus 0.05%, by law. (Durbin amendment)

• The Visa credit interchange rate for charities is 1.35% plus 5 cents. Note that the processor/acquiring bank will add a markup on both types of card payments.

• A small business account at a major bank charges 45 cents per check after a certain number per statement.

Therefore, roughly, credit is best under $12.31, and debit wins under $480, anything above you want check.

Importantly, we ignored processor markup, so it's a rough estimate. Also, some small business processors (e.g. Square, Stripe) charge a fixed rate for both credit and debit. Their business model is to make little to no profits on credit balanced by large markups on debit. Many small businesses don't understand the difference in wholesale fees between these cards.

Answer 2

Adding to the other answer https://money.stackexchange.com/a/162444/19670, in case of checks, the nonprofit may need to send someone to deposit the check. The personnel's time is a hidden cost that may not be negligible.

The nonprofit may also need to handle bounced checks and may be charged by their bank because of this. Even among honest donators, there's still a percentage who forgot that their bank accounts do not have sufficient funds.

Ask the non-profit so they can give you their preferred way of donation.