Payment processing is vital to your nonprofit organization as it ensures a proper online donation transaction between your bank and the bank of your donor. When accepting any online payment, a processor is useful for receiving donations, selling event tickets and merchandise, collecting membership fees, etc. In other words, nonprofit payment processing is a smart investment and a great way to increase the revenue of your business operation.
How does Nonprofit Payment Processing Work?
The payment processing starts when a donor purchases tickets, buys merchandise or makes a donation. If an online donation is made through a credit or debit card, the payment process verifies the account and determines if the funds are accessible to the organization.
After that, the payment gateway will also check if the card information is valid. It is to find out if the credit card number, the name, address, and the security code belong to a human being and not from a bot.
If the credit card gets accepted, the nonprofit payment processing continues as the gateway makes a transfer of funds from the card company of the donor to a merchant account. Merchant accounts vary in rates like bank accounts.
How much the nonprofit organization pays for every donation depends on the rate of the merchant account. However, if the donor uses a debit account, there is no need to use a merchant account to transfer the online donation. Once the donation gets transferred to the nonprofit bank account, this completes the transaction.
What are the Benefits?
It is beneficial to use a payment processor for your nonprofit. It guarantees the safe processing of donations. The online donation form that you are using can help collect all the necessary information about your donor. While you will likely get only the essential information, it would be a good start to create a donor profile in your nonprofit database.
Payment processing also increases the rate of donor retention, especially if you are using a capable payment processor. More donors are willing to contribute if they feel safe and secure with your organization. Eventually, receiving donor donations every month becomes easy for your organization.
Payment Method
The nonprofit should be able to accept multiple methods of payment from its supporters. It helps your organization a good option for donating. The payment processor should be able to process all major debit and credit cards considering their prevalence. Another popular method used is the Automated Clearing House (ACH) payment, which is also called eCheck. It allows the donor to make a direct online transaction from their debit checking account. In general, an ACH payment is an excellent option for nonprofit organizations as it has lower transaction fees.
Also, some supporters prefer to use their bank accounts when donating than giving their credit card information to nonprofits. Make sure to offer both ACH debit and credit card options to your donors, to help increase your chance of getting more donors with their chosen online payment method.
Giving donations is getting widespread, and people are looking for convenience even with gift-giving. Therefore, a nonprofit organization should have an easy way to accept a digital donation. Use the right nonprofit payment processing to stay competitive and always be updated in providing a convenient and safe gift-giving experience to your donors.
