If you are considering accepting credit card donations for your nonprofit, there are a number of factors to weigh. First, think about the type of transactions you are most likely to encounter: recurring (such as monthly pledge payments) or one-time only, donor initiated (such as through your website) or with payment information entered by staff.
The type of payments your nonprofit decides to accept will drive your choice of processing technology. For example, in the case of a recurring monthly gift, you probably will not want to have to enter each donor's credit card information and payment amount into a credit card terminal each month. One of the most beneficial uses for electronic payment is automating the fulfillment of pledge payments or monthly giving programs.
Some solutions for processing credit cards do not require you to have your ownmerchant account, instead establishing a merchant account in the third-party name to process your transactions. But unless your organization only processes a few credit card transactions a month, it is generally better to have your own merchant account.
Potential problems with third-party processing can arise when the name that appears on a donor's credit card does not match that of your nonprofit -- which may result in the donor disputing the charges.
When you compare various merchant account services providers, nonprofits should weigh all the various costs, ranging from the one-time to the ongoing. These costs may include one-time fees for setting up your merchant account, a monthly account fee, transaction fees per item and a discount rate that is a percentage of the transaction amount, as well as indirect costs such as the time needed for staff to enter credit card data.
Choosing to accept credit card donations can give a major boost to your nonprofit. As you consider the options, keep in mind that the simplicity, security, and administrative efficiency of your online process are generally the key features of a successful solution when accepting electronic payments.
