Mastercard Requirements

Important Update: Good news! Nonprofits that maintain low chargeback rates are not required to comply with the new recurring payment rules.

Read Mastercard’s Revised Standards here.

History of this issue:

On September 22, 2022, Mastercard’s new requirements for recurring transactions went into effect. The language in the regulations as they were written, specifically the definition of subscriptions resulting in “delivery of physical products or digital goods” appeared not to include nonprofit recurring donations. However, in August, Mastercard confirmed that they intended for these new rules to apply to nonprofit sustainer donor programs.

On September 2, after actively working on behalf of nonprofits to clarify the new recurring transaction requirements from Mastercard ahead of the September 22 effective date, TNPA had very good news to share, that Mastercard “will be extending the effective date of these requirements for nonprofits until March 21, 2023.” This extension is an acknowledgement that the new requirements as written caused considerable confusion among nonprofits and their processing platform partners, delaying steps toward compliance.  While TNPA recognized this as a significant step in the right direction, we continued our work building a coalition of US and international umbrella groups to clarify with Mastercard the details of compliance, and assess the impact of the new processes on nonprofit organizations.

Now, we are very happy to learn that Mastercard is exempting nonprofits and charities from this rule, and will follow up only with those who have excessive chargebacks for 4 consecutive months. You can read the new regulations here.

Thank you to everyone who has participated with us in this process, providing data, making connections, and signing onto the letter to Mastercard (below). Together, with our members, our allies, and our coalition partners, we made the voice of nonprofit sector clear, and Mastercard listened. Thank you to all.

Community Letter to Mastercard

Thank you to the 215 nonprofit organizations that signed onto this letter to Mastercard, helping to ensure that nonprofit voices were heard.

To whom it may concern:

We write to you today to express concern about the new Mastercard regulations related to recurring transactions. We would like to meet with you to discuss in detail the impact these regulations would have on the work of nonprofit organizations across the United States if applied to our recurring charitable donations.

It is nonprofit organizations that the world relies on to feed the hungry, house the homeless, care for the sick, save animals both domestic and wild, support communities in crisis, protect the environment, promote human rights, and lead the charge on achieving diversity, equity, and inclusion across our society.

We rely on donations from generous individuals to make our work possible. Recurring donations are a crucial part of that support. Required compliance with Mastercard’s new recurring transaction regulations would create an undeserved operational and financial impact on our work.

We understand Mastercard’s intention with the new regulations is to mitigate negative practices associated with the utilization of a subscription billing model and/or a negative billing option. Our research across a broad swath of nonprofit organizations shows that nonprofit donations do not result in substantial chargebacks. These regulations, if applicable, could put an undue burden on nonprofits and would not move the needle on Mastercard’s goal of reducing chargebacks.

Right now, after two years of the Covid-19 pandemic, increased calls for racial and social equity, and an unusual number of natural disasters wreaking havoc in our country, nonprofit organizations are facing pressure to not only maintain, but also to increase, our missions’ reach and impact.

At the same time, we are facing daunting external pressures that make it ever more challenging to achieve our missions. Facing staffing shortages, supply chain issues, a looming recession that will impact financial support from donors, and the current financial and socioeconomic climate, our industry is already under programmatic and operational pressure.

We hope that you will agree to meet with a representative group of us to better understand how nonprofits use recurring donations in our fundraising, our commitments to ethical fundraising, the impact these regulations would have on nonprofits, and the research that we have gathered.

Together, we can forge a path forward that supports Mastercard’s intention to protect the consumer and reduce chargebacks AND avoid additional undue stress on our charitable organizations.

Sincerely,