Visa credit card changes may affect some charities and their fundraising

publication date: Oct 14, 2018
author/source: Maddy Sawyer

As of October 14, 2018, VISA will be enforcing new requirements for all ecommerce and phone transactions using Visa cards. These requirements are that all such transactions will require the Visa card’s CVV number, which is the 3-digit number on the back of the card used for security verification, before the payment can be processed. There is also the further requirement that a card’s CVV number cannot be requested in written form (CVV numbers can be entered into online payment forms when completing the transaction, but cannot be requested on paper forms, to be processed later).

This move is in response to overall trends in fraudulent credit card transactions in Canada. It used to be that most fraud came from swiping transactions, using a copy of the card’s magnetic strip. However, with the introduction of more secure chip technology, swipe transactions have become less frequent, and indeed, Visa will be phasing out magnetic strip transactions by October 2019. This has led to an increase in fraud with card not present (CNP) transactions, which now accounts for the vast majority of credit card fraud in Canada. The CVV requirement is meant to add an extra layer of protection for Visa cardholders. Any merchant that accepts a payment without the CVV number, or with a number that is incorrect, will be liable for that transaction.

What are the implications of this change in policies for the charity sector? This change is not likely to have a large impact on the charity sector. Online service providers in Canada, such as CanadaHelps, already require the CVV number when accepting a donation. It has been a standard practice in Canada for many years now. Therefore, for most charities that accept Visa CNP donations, this will not change their practices or operations in any way.

However, there still may be some impact on certain registered charities. There are smaller or less technologically sophisticated charities. These charities may not have websites or service providers that accept online payments, and resort to collecting credit card donations via paper donation forms, which they then process manually on credit/debit terminals.

The new requirements will force these charities to change their systems and for some it may be a burden. With the new rules the charity cannot collect the CVV on the paper form, the charity will have to 1) call their donors individually to get the CVV number over the phone, 2) take the payment in person with the card present, or 3) forgo accepting Visa card donations. All of these options could result in increased costs and loss of donations for these charities, which in turn could be problematic for these particular charities that rely on every donor they can get.

There is no obligation for charities to accept donations via credit cards, but if they do, they have to accept the terms and conditions of those payment forms.

While this new requirement from Visa could incur additional costs or donation losses for certain charities that may not be able to afford those costs and losses, overall, this change is not likely to have a large effect on the charity sector. Many charities that accept credit card donations, accept those donations online, through service providers that already comply with this requirement. Further, it is important to remember that this change is in response to increased CNP fraud. It is designed to give cardholders more protection and more confidence in their spending. If cardholders are not confident in the security of their credit cards, they are less likely to use the credit card, which makes donations much easier for people. Charities should review their systems to see if this change from Visa will impact them.

Maddy Sawyer is a lawyer at Blumberg Segal LLP in Toronto, Ontario. She can be contacted at 416-361-1982. To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit,,,or

This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.

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