UK charities accepting card donations may be able to reduce some of the underlying interchange cost associated with those transactions.
However, there is an important distinction to make: there is not a single universal 0% interchange exemption that should be assumed to apply to every charity transaction across every card scheme.
Mastercard's published UK domestic interchange schedule includes an Approved Charity Waiver at 0.00% for qualifying consumer card transactions.
Visa's current publicly available UK domestic interchange schedule does not show an equivalent charity-specific 0% interchange category, so charities should confirm their actual Visa treatment directly with their acquirer or payment provider rather than assuming the same arrangement applies.
Merchant classification also matters. Both Visa and Mastercard recognise MCC 8398 – Charitable and Social Service Organisations, but being classified under MCC 8398 does not by itself mean that every transaction will automatically receive 0% interchange.
And even where interchange is reduced to 0%, card processing itself is not necessarily free. Scheme fees, acquiring margin, gateway charges and other payment costs may still apply.
What is interchange?
Interchange is one of the underlying costs involved when a card payment is processed.
In a typical four-party card transaction:
- the donor is the cardholder;
- the donor's bank is the issuer;
- the charity accepts the card payment;
- the charity's payment provider or acquiring bank is the acquirer; and
- Visa or Mastercard provides the card-network infrastructure.
Interchange is generally paid by the acquirer to the issuer.
The cost may then form part of the overall Merchant Service Charge or card-processing price paid by the charity.
Interchange should not be confused with the charity's total payment-processing fee.
What are the standard UK interchange caps?
The Payment Systems Regulator states that, where the UK Interchange Fee Regulation applies, domestic UK consumer-card interchange is currently capped at:
- 0.20% for consumer debit cards, including prepaid cards; and
- 0.30% for consumer credit cards.
These caps generally apply where the merchant, acquirer and card issuer are all located within the UK and the transaction falls within the scope of the UK Interchange Fee Regulation.
They are interchange caps rather than limits on the total fee that a merchant or charity can be charged.
Commercial cards, international cards and other transactions can have different interchange structures.
Read our Merchant Account Fees guide for a wider explanation of the different layers of card-processing cost.
What is the Mastercard Approved Charity Waiver?
Mastercard's published UK domestic interchange schedule includes a fee category called the Approved Charity Waiver.
Within the published consumer-card schedule, the Approved Charity Waiver is shown at 0.00% interchange.
This appears within Mastercard's published UK consumer-card interchange tables alongside standard transaction categories.
That creates a potentially meaningful saving for charities processing a significant volume of eligible card donations.
However, charities should not simply assume the waiver is automatically being applied.
The practical questions are:
- Does the charity qualify?
- Has the merchant account been classified appropriately?
- Does the acquirer support the relevant Mastercard charity treatment?
- Which transactions qualify?
- Is the reduction actually being passed through to the charity?
- Can the charity see this within its pricing or processing statements?
Does Visa offer the same charity interchange exemption?
This is where charities need to be careful.
Merchant Advice Service reviewed Visa's current publicly available UK domestic interchange schedule dated February 2026.
That published schedule shows the standard UK consumer debit and credit interchange categories, together with a number of other Visa programmes, but it does not show a directly equivalent UK charity-specific 0.00% interchange category.
This means MAS does not recommend telling charities that Visa and Mastercard automatically provide the same 0% charity waiver.
It does not necessarily mean that no other Visa commercial, acquiring or programme arrangement can ever apply to a charity.
Instead, charities should ask their acquirer specifically:
- What interchange rate applies to our Visa donation transactions?
- Does any charity-specific Visa programme apply to us?
- Which transactions are eligible?
- How can we identify the rate on our statements?
The answer should be based on the charity's actual acquiring arrangement rather than an assumption that all card schemes operate identical charity programmes.
What is MCC 8398?
Merchant Category Codes are used by the card schemes to classify merchant activity.
Both Visa and Mastercard publish MCC 8398 for charitable and social-service organisations.
Visa describes MCC 8398 as covering non-political fundraising organisations soliciting charitable donations and organisations providing social welfare services.
Mastercard similarly describes MCC 8398 as covering charitable organisations, social-service organisations, advocacy groups, community organisations and health agencies.
Correct merchant classification is important because card pricing, scheme rules and specialist programmes can depend on the activity being processed.
Does MCC 8398 automatically give a charity 0% interchange?
No.
MCC 8398 is a merchant classification.
It should not be treated as a guarantee that every card transaction processed by that merchant will receive a 0% interchange rate.
The charity should still confirm:
- its registered MCC;
- the applicable card scheme;
- the transaction type;
- whether the transaction meets any programme requirements;
- the acquiring arrangement; and
- the interchange rate actually being charged.
Are donations and charity-shop sales treated the same?
Not necessarily.
A charity can carry out several different types of activity.
For example:
- a supporter may make a £50 charitable donation;
- another customer may spend £50 purchasing goods in a charity shop;
- somebody else may buy a ticket for a fundraising event; and
- another supporter may make a recurring online donation.
Those payment flows should not automatically be assumed to have identical card-scheme treatment simply because the same organisation ultimately receives the money.
Large charities operating retail stores, online fundraising, events and direct donations should make sure their acquirer understands the different activities being processed.
Review the whole charity payment setup
Interchange is only one part of charity payment processing. Online donations, recurring giving, card machines, contactless fundraising, Gift Aid capture and CRM integration should also be considered.
Read our Charity Payment Processing guide →
Does the Mastercard waiver apply to all donations?
Charities should not assume that every transaction automatically receives the Approved Charity Waiver.
The publicly available Mastercard schedule confirms that the Approved Charity Waiver exists and lists a 0.00% interchange rate within its UK domestic consumer-card schedule.
However, the charity should confirm the eligibility and implementation requirements with its acquiring provider.
In particular, ask whether eligibility differs according to:
- card type;
- domestic versus international cards;
- online versus face-to-face transactions;
- one-off versus recurring donations;
- merchant classification;
- transaction coding; and
- the nature of the payment.
If a provider states that an approval or registration process is required, ask it to explain the current scheme process and who is responsible for completing it.
What about international donations?
International card payments need to be considered separately.
The standard UK Interchange Fee Regulation caps apply to eligible domestic transactions where the merchant, acquirer and issuer are within the UK.
They should not be assumed to apply to an overseas-issued card.
Following the UK's departure from the European Union, certain card-not-present transactions between the UK and European Economic Area can carry significantly different interchange rates from UK domestic consumer transactions.
Charities receiving substantial overseas donations should therefore establish:
- where donors are located;
- where their cards are issued;
- which currencies are accepted;
- what international interchange applies;
- whether additional cross-border fees apply; and
- whether foreign-exchange charges are involved.
What about commercial cards?
Commercial cards should also be separated from standard UK consumer cards when analysing interchange.
The UK consumer interchange caps do not apply universally to commercial cards.
This can matter for charities receiving larger payments or donations from businesses using corporate, purchasing or business cards.
A charity analysing its card costs should therefore understand the card mix rather than applying one interchange assumption across every transaction.
Does 0% interchange mean free card processing?
No.
This is one of the most important points for charities to understand.
Card-processing costs can include:
- interchange;
- scheme and processing fees;
- acquirer or payment-provider margin;
- gateway fees;
- authorisation charges;
- terminal rental;
- contactless donation-device charges;
- monthly account fees;
- PCI-related charges;
- refund fees;
- chargeback fees;
- international-card charges; and
- foreign-exchange costs.
A charity receiving 0% interchange on a qualifying transaction may therefore still pay other costs associated with accepting and processing that card payment.
How much could a charity save?
The saving depends on the transaction mix and on which payments actually qualify.
As a simple illustration, where a domestic consumer transaction would otherwise attract:
- 0.20% interchange, the interchange element on £100 would be £0.20; or
- 0.30% interchange, the interchange element on £100 would be £0.30.
If an eligible transaction instead qualifies for a 0.00% scheme interchange category, that particular interchange component is removed.
However, charities should not multiply their entire annual processing volume by 0.20% or 0.30% and assume that figure represents a guaranteed saving.
The actual result depends on:
- Visa versus Mastercard volume;
- debit versus credit cards;
- consumer versus commercial cards;
- UK versus overseas-issued cards;
- eligible versus non-eligible transactions;
- pricing model; and
- whether reduced interchange is passed through under the commercial arrangement.
Does pricing model matter?
Yes.
How easily a charity can see a reduction in interchange depends partly on how its provider prices the account.
Blended pricing
With blended pricing, underlying costs and provider margin may be combined into a single transaction rate.
This can make it harder to see whether lower underlying interchange is translating directly into a lower merchant charge.
IC+ pricing
Interchange Plus pricing separates the underlying interchange cost from the provider's commercial margin.
This can make changes in interchange more visible.
IC++ pricing
IC++ typically separates interchange, scheme-related costs and provider margin more clearly.
For larger charities processing significant card volumes, this can make the underlying economics easier to analyse.
Greater transparency does not automatically mean the overall price is cheaper, but it can make it much easier to see where the charity is spending money.
How can a charity check whether it is receiving the waiver?
Start with the acquiring provider.
Ask for written confirmation of:
- the MCC applied to the charity;
- whether the Mastercard Approved Charity Waiver is supported;
- whether the charity is currently registered or eligible;
- which Mastercard transactions qualify;
- what interchange rate is being applied;
- how the rate appears on processing statements;
- what treatment applies to Visa transactions;
- what happens with international cards;
- what happens with commercial cards; and
- which other card-processing fees remain.
This is more useful than simply asking whether the provider offers "charity rates".
Can the charity see interchange on its statement?
Possibly, depending on the pricing model and level of reporting supplied by the provider.
Charities using pass-through structures such as IC+ or IC++ may have greater visibility of underlying interchange than charities paying a simple blended percentage.
If the statements do not provide enough detail, ask the provider for a transaction-level or card-type breakdown.
For larger charities, useful data can include:
- total card turnover;
- Mastercard volume;
- Visa volume;
- consumer debit volume;
- consumer credit volume;
- commercial-card volume;
- international-card volume;
- interchange charged;
- scheme fees;
- provider margin; and
- other transaction charges.
Review Payment Providers for Your Charity
Should a charity switch provider just to access lower interchange?
Not necessarily.
Interchange is only one part of the commercial relationship.
Before switching, compare:
- current effective processing cost;
- interchange treatment;
- scheme fees;
- provider margin;
- gateway fees;
- online donation functionality;
- recurring-payment capability;
- Direct Debit requirements;
- CRM or fundraising integration;
- contactless donation devices;
- charity-shop terminals;
- international donations;
- settlement;
- reporting;
- contract terms; and
- support.
A reduction in interchange can be valuable, but it should form part of a complete payment-cost review rather than being considered in isolation.
Questions to ask your charity's payment provider
For a useful review, ask:
- What MCC is our merchant account registered under?
- Do you support Mastercard's Approved Charity Waiver?
- Are we currently receiving it?
- Which transactions qualify?
- What interchange rate are our Mastercard donations attracting?
- What interchange rate applies to our Visa donations?
- How are international cards treated?
- How are commercial cards treated?
- Are charity-shop transactions separated from donations?
- What scheme fees do we pay?
- What acquiring margin do we pay?
- Can you provide an interchange breakdown?
- Would our pricing change if the underlying interchange changed?
These questions give the charity a much clearer picture of whether the payment setup is actually benefiting from any available scheme arrangements.
Merchant Advice Service view
The term charity interchange exemption can make the subject sound much simpler than it is.
The practical issue is not simply whether a charity exists or whether it uses MCC 8398.
The charity needs to understand:
scheme → card type → merchant classification → transaction type → eligibility → interchange rate → scheme costs → provider margin → total processing cost
Mastercard's published UK documentation provides clear evidence of an Approved Charity Waiver at 0.00% within its domestic consumer-card interchange schedule.
MAS has not found an equivalent charity-specific 0.00% category in Visa's current publicly available February 2026 UK domestic interchange schedule, so charities should verify Visa treatment directly with their acquiring provider.
This approach avoids assuming that one scheme's published arrangement automatically applies to another.
FAQs
Is there a 0% interchange rate for UK charities?
Mastercard's published UK domestic interchange schedule includes an Approved Charity Waiver at 0.00% for qualifying transactions. Charities should confirm eligibility and implementation with their acquirer.
Does the charity interchange waiver apply to Visa?
Visa's publicly available February 2026 UK domestic interchange schedule does not show a directly equivalent charity-specific 0.00% category. Charities should ask their provider what Visa interchange treatment applies to their own transactions.
What is MCC 8398?
MCC 8398 is the Merchant Category Code used by Visa and Mastercard for charitable and social-service organisations. Correct classification is important, but MCC 8398 alone should not be treated as a guarantee of 0% interchange.
What are normal UK consumer interchange rates?
Where the UK Interchange Fee Regulation applies, the current caps are 0.20% for consumer debit cards, including prepaid cards, and 0.30% for consumer credit cards.
Does 0% interchange mean card donations are free to process?
No. A charity can still pay scheme fees, provider margin, gateway charges, transaction fees, terminal costs and other payment-processing charges.
Do charity shop transactions qualify for the same treatment as donations?
They should not automatically be assumed to. A charity may process donations, retail purchases and other payment types, and the acquirer should understand the different activities being processed.
Do international donations qualify?
Do not assume so. UK domestic interchange rules and scheme programmes can differ from the treatment of overseas-issued cards. Ask the acquirer how international donations are priced.
How can a charity find out what interchange it is paying?
Ask the acquiring provider for a breakdown by card scheme, card type and interchange category. IC+ and IC++ pricing can provide more visibility than a blended rate.
Sources & References
About Merchant Advice Service
Merchant Advice Service (MAS) provides independent information, comparison and provider-matching support for UK businesses and organisations looking for payment services.
We help organisations understand their payment requirements before introducing them to providers that may be suitable. MAS does not provide payment processing services directly.
Disclosure: Merchant Advice Service may receive commission from payment providers following a successful introduction. This does not increase the price paid by the organisation and does not determine which providers are included in our editorial guidance.
