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What payment processing options do non-profit organizations have?

01 Jul Posted in Social Media

While in the beginning it may seem a little confusing, at present more and more non-profit organizations accept credit cards because it is a faster way to collect funds and because big donors do not carry cash with them. It has been proved that availability increases the number of donations made each year. In order to successfully accept electronic payment, the non-profit must get a credit card terminal which is directly linked to a merchant account. When it comes to processing payments, there are many options to choose from and certain factors need to be taken into consideration.

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The type of transaction

Given the fact that donations are not being made on a regular basis, the question is whether it is really necessary to implement an electronic payment system. While the non-profit does not make use of the credit card information, the system is useful for setting up an effective way to stimulate donors into giving money. An automated payment system will surely lead the way for scheduled payments and monthly programs. Even in the case of special events it is highly necessary to be able to handle transfer of funds in a safe way. The fact is that electronic payment is a lot safer than paying in cash because the personal information is carefully safeguarded and new technologies do not even require typing the PIN number anymore.

The merchant account

The only way to obtain a credit card terminal is to establish an agreement with a merchant, which is usually represented by a local bank or any other financial institution. The merchant account represents the terminal through which the transactions are processed, meaning that the money goes straight into the organization’s bank account. The only disadvantage is the fact that merchant accounts do involve some monthly fees and there can be delays in the return of the funds. Due to the fact that the start-up fees vary from merchant to merchant, it is important to search attentively and to be sure to read the fine print of the contract. Many merchant services can be trusted based on the fact that they work with other non-profit organizations as well.

Third-party processors

With the help of a third-party processor, the organization is not obliged to set up a merchant account, but simply uses the account of the party in order to accept donations. The disadvantage of such a thing is the fact that the third-party will perceive a fee for the return of the funds and limits the ability of gathering contact information. Moreover, donors are not happy to see the name of the third-party of the credit card statement and the confusion created may lead to the tear or relations.

To conclude, for the benefit of the non-profit organization, it is advisable to consider a merchant account that can offer the right equipment that functions on wireless terminals and thus can be transported even to a charitable event. There are various technologies out there that match the type of transaction of the organization and it is worth considering a long-term solution.