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This blog will delve into the intricacies of credit card processing for nonprofits, explore various payment processor options, and highlight how you can achieve zero processing fees with Glass Register.
The Importance of Credit Card Processing for Nonprofits
63% of donors prefer to give online with a credit or debit card, so it’s important to offer this option.
Credit card processing for nonprofits, therefore, is vital for fundraising. However, it usually comes with processing fees.
Typically, these fees range from 2-3% per transaction, which can add up significantly over time. Understanding these fees and exploring options to minimize them is crucial for any nonprofit looking to maximize its impact.
Common Credit Card Processing Fees
Before diving into specific payment processors, it’s important to understand the types of fees associated with credit card processing for nonprofits:
- Transaction Fees: These are the most common fees and are typically a percentage of each transaction, often accompanied by a small fixed fee. For example, a fee structure might be 2.9% + $0.30 per transaction.
- Monthly Fees: Some processors charge a monthly fee for using their services. This can vary widely depending on the provider and the features offered.
- Setup Fees: Initial setup fees may apply when establishing an account with a new payment processor.
Understanding these fees helps nonprofits make informed decisions about which payment processors align best with their financial goals and operational needs.
3 Payment Processor Options & Fees
When selecting a payment processor, nonprofits should consider both the cost and the features offered. Below are the most popular options for credit card processing for nonprofits and the fees associated with them for registered charities:
If you’re looking for an option to accept donations online with zero fees, Glass Register donation forms offer zero transaction and monthly fees, so you keep 100% of your donations. There is also zero setup fees!
1. PayPal
Fees: PayPal offers a discounted nonprofit rate of 1.9% + $0.30 per transaction. They waive the monthly fee for registered 501(c)(3) organizations.
Pros: PayPal is widely recognized and trusted by donors, making it a convenient option for many nonprofits. It also supports various currencies, which is beneficial for organizations with international donors.
Cons: While PayPal’s fees are competitive, they are not the lowest available. Additionally, customization options for donation pages are limited, which may impact branding.
2. Stripe
Fees: Stripe offers registered nonprofits a discounted rate of 2.2% + $0.30 per transaction, with no setup or monthly fees.
Pros: Stripe is known for its developer-friendly platform, offering extensive customization options. It integrates seamlessly with many fundraising tools and supports recurring donations.
Cons: The fees are on the higher end, and while the platform is robust, it may require technical expertise to set up and manage.
3. Square
Fees: Square charges 2.9% + $0.10 per transaction for online payments and 2.6% + $0.10 for in-person payments.
Pros: Square is ideal for nonprofits that conduct in-person fundraising events, as it provides a mobile card reader for easy transactions. It also offers a simple setup process.
Cons: Square does not offer a specific nonprofit discount, and fees can be higher for online transactions.
A 100% Free Alternative
Glass Register is a great option for nonprofits looking to eliminate processing fees entirely. With Glass Register, there are zero credit card processing fees and zero monthly fees for nonprofits, so you keep 100% of the donations you collect online.
This solution allows nonprofits to maximize the impact of every donation, ensuring that every dollar donated goes directly towards the organization’s mission. This can be a game-changer for smaller nonprofits or those operating on tight budgets.
Glass Register also offers a user-friendly experience for both donors and administrators. Nonprofits can create customized donation pages, send receipts automatically, and track donations in real-time.
Best Practices for Managing Credit Card Processing Fees
While choosing the right payment processor is crucial, there are additional strategies nonprofits can employ to manage and potentially reduce processing fees:
- Encourage Donors to Cover Fees: Many donors are willing to cover processing fees if given the option. Including a checkbox on your donation form can help offset these costs.
- Negotiate with Processors: Some payment processors may be open to negotiating lower fees, especially for high-volume nonprofits. It’s worth exploring this possibility.
- Optimize Donation Forms: Ensure your donation forms are user-friendly and mobile-optimized to reduce the likelihood of abandoned transactions, which can lead to chargebacks.
- Regularly Review Processor Options: The landscape of credit card processing for nonprofits is constantly evolving. Regularly reviewing and comparing processor options ensures your organization is getting the best deal.
- Leverage Technology: Use tools like nonprofit CRM and nonprofit case management software to streamline operations and reduce administrative costs.
How Credit Card Processing Works
To fully grasp the implications of credit card processing fees, it’s essential to understand how the process works. Here’s a step-by-step breakdown:
Donation Initiation: A donor makes a contribution via credit card on your nonprofit’s donation page. This can be done online, in-person, or through mobile devices.
Payment Gateway: The donation information is sent through a payment gateway, which acts as a secure bridge between the donor’s credit card and the payment processor. The gateway encrypts the data to protect sensitive information.
Authorization Request: The payment processor forwards the transaction details to the donor’s credit card network (e.g., Visa, MasterCard) for authorization. This step ensures that the donor has sufficient funds and that the transaction is legitimate.
Bank Communication: The credit card network communicates with the donor’s bank to verify the transaction. If approved, the bank sends an authorization code back to the credit card network.
Transaction Approval: The credit card network sends the approval back to the payment processor, which then informs the payment gateway that the transaction is authorized.
Funds Transfer: The approved donation amount is transferred from the donor’s bank to the nonprofit’s merchant account. This process can take a few days, depending on the payment processor and bank policies.
Confirmation and Receipt: Once the transaction is complete, the donor receives a confirmation message and receipt, often via email, acknowledging their contribution.
Understanding this process is crucial for nonprofits as it highlights the various stages where fees may be applied and the importance of choosing a reliable payment processor.
Conclusion
Credit card processing for nonprofits is a crucial aspect of modern fundraising. By understanding the associated fees and exploring various payment processor options, nonprofits can make informed decisions that maximize their financial impact.
While traditional processors like PayPal, Stripe, and Square offer reliable services, Glass Register provides an innovative solution with zero credit card processing fees for nonprofits.
For organizations looking to eliminate processing fees and ensure every dollar donated goes towards their cause, Glass Register is the best credit card processing for nonprofits.
Remember, the goal is to maximize the funds available for your mission. With the right strategies and tools, your nonprofit can thrive in the digital fundraising landscape. If you’re ready to take your fundraising to the next level, consider exploring other resources available at Societ’s Fundraising Resources Hub.
