Occasionally when I purchase groceries at the supermarket
the card accepting device asks if I want to give some money to various causes.
I usually decline for several reasons but the overwhelming one is that if I
organize my charitable contributions I receive a tax deduction whereas if I
impulse give, I do not get that tax write-off.
If the design of payment systems allowed payers to
automatically give an amount to the charity or charities of their choice with values
of their choice then I suspect that the amount of charitable gifts will
increase significantly. If we look at the data protocol standards such as ISO
8583 we see there is room for various amounts and for various fees (not to
mention superfluous data that have nothing to do with a financial transaction) but
only one payee. By creating payment data protocols with multiple payees and
specific amounts for each payee then it is possible to designate charities as
co payees. It is also possible to designate sales tax recipients, which may
relieve payees of the administrative burden of collecting and paying sales tax.
It is possible to automatically give to charity with the
current cumbersome protocols but it too expensive to utilize unless the payment
networks allowed a charitable transaction to trail a regular purchase with no
extra charge. If they did so then they no doubt would receive a tax deduction
and payment service providers could gain good will because they facilitate charitable giving. However,
if we could convince the various players involved in a single transaction not
to charge for a trailing charitable message, the probability of agreeing to more
than one charitable is next to nil.
If buyers used an e-check application (see http://paymentnetworks.blogspot.com/2014/10/a-real-e-check-application.html
) then it would be possible to cut as many checks to charities as the buyer wanted
with no extra overhead unless the financial institution charged a fee for each
check or for too many checks. However, as the reader(s) of this blog know, I
have frequently advocated for the creation of a data protocol specifically for
movement of financial data from a personal electronic device (PED) to a point
of presence (POP) and from there to a FI with no translation needed. If that protocol allowed for multiple payees
then it would be common practice for payment applications to allow users to
configure payments to go to the charities of their choice without needing to do
so for each transaction or by planning each contribution. The payment
applications keep track of payment so end of the year accounting becomes a
simple matter of importing the charitable amounts to the tax preparation process.
Future payment architecture no doubt will allow for multiple
payees; however that does not prevent the current payment system providers from
allowing the free donation of funds to charities. With a little imagination
payment system providers could use the additional amounts field in the ISO 8583
message to accomplish the same goal seamlessly, no trailing transaction needed.
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