Credit Card Processing for NonProfits

As an increasing number of non-profit organizations are now accepting donations by credit cards, it is important to know your options. Accepting donations via credit card certainly provides many advantages, including the ability to collect funds faster as well as larger donations. Donors also benefit as using their credit card is faster and more convenient and can also provide rewards offered by their issuer of their card. There are actually several options available for non-profit organizations that wish to make the move to accepting credit cards.

There are numerous factors that should be taken into consideration when determining whether you should accept credit card donations as a non-profit organization. One of the most important factors to consider is the type of transactions you will most likely handle. For instance, will most of your transactions involve recurring payments or will they be one-time only, such as donor initiated transactions that take place through your non-profit organization’s website. Or, will your transactions primarily be handled with payment information being entered by your organization’s staff. You should also consider whether most transactions you encounter will involve the physical presence of a credit card which can be swiped.

Although there are various options in terms of processing technology, the types of donation payments you organization will accept will help to determine the best system for your needs. For instance, if your organization commonly involves recurring gifts the task of entering credit card information each month is likely to become burdensome. In that case, a merchant account is most likely the best option for helping you to process credit card donations.

Merchant accounts are among the most traditional options for accepting payments of any kind through a credit card processor. Your non-profit organization can sign up for a merchant account with any credit card company or bank. The primary factor to weigh when considering a merchant account is the amount that will be charged in setup fees as well as per transaction fees by the process or bank. These fees can vary significantly. It is extremely important to make certain you read all of the fine print to determine these fees and make certain this is the right choice for you. The advantage to having a merchant account as a non-profit is that your organization will be the name that appears on the credit card statements for your donor. Additionally, donations will come directly to your organization’s bank account. There are some disadvantages, including the fact that you will need to go through the same type of credit check as any other business. This can take some time.

Keep in mind that while a merchant account is one possible option, you need not have your own merchant account in order to accept donations for your non-profit organization. A third-party processor is another option if you only process a few transactions per month; however, there are often disadvantages to this option. For example, with a third-party processor the name that appears on your donor’s credit card statement will not be the same as your non-profit organization and this can sometimes result in problems, including disputes and charge backs. There is also usually a delay associated with third-party processors with payments only being sent out once or twice per month.

Comparing various options for merchant account services is imperative in finding the right service provider for your needs. In comparing services, be sure to consider all of the relevant costs, including one-time fees for establishing your merchant account, monthly account fees and per item transaction fees. Indirect costs should also be carefully considered, including the staff time necessary for entering credit card information from donors.

The decision to accept donations via credit card is one that can provide your non-profit organization with an important boost. As you consider the various options available to you, bear in mind that security, simplicity and efficiency of management for your online process are critical to ensuring a successful electronic payment solution.

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