Online Payment Processing for the Non-Profit Business

Online payment processing may sound "high-tech" and complicated, but even the smallest nonprofit can easily get set up to receive payments through its website.

Many people hold some discretionary funds in an online payment system account so it's easy for them to buy or donate online, but credit card payments are still the norm. If your organization can accept online credit card payments, you maximize the number of people who are able to donate, pay membership dues and event registration fees, or make a purchase through your website.

To bring it down to the absolute simplest terms, your nonprofit will need 3 things in order to handle online payments by credit card:

1. a link or button for people to click when they want to send you money,
2. a payment gateway — the online equivalent of a credit card “swipe” machine, and
3. a merchant account, to handle the backend business with the banks.

The link or button is the easy part — most online payment processors will supply copy-and-paste code for buttons to put on your website, or a link to include in your emails and other communications.

To get a merchant account, you can talk to your bank or financial institution or you can get an independent sales provider to set you up.

If your organization already has a merchant account that allows you to process credit card payments offline, a payment gateway solution will enable you to process credit card payments directly via your own website. The tech requirements to set this up can be a consideration, however the fees can vary quite widely.

For a nonprofit that deals with hundreds of donations a month, and especially if you already receive offline donations for which you need to be able to accept credit cards, then this method may be right for you.

Many worthy nonprofits work at a much smaller scale and have no need for a full-fledged e-commerce setup — or perhaps your organization is having second thoughts about carrying the costs of a merchant account, in these times of belt-tightening, ou can still accept credit card payments online, through a third-party payment processor.

Third-Party Online Payment Processors

Your supporters can easily use their credit cards to send money to you through a hosted payment processing service. In this situation, the service’s own merchant account will handle the transaction for you — for a fee.

This sort of service is generally the quickest and easiest way to set up your organization to collect donations and other payments through your website. The “Donate” or “Buy Now” button goes on your website, but people click through from there to carry out the financial transaction on the service’s own secure website. When a payment is made, the payer automatically get a receipt by email, and you’ll get an email to notify you that the payment has been made.

Be aware that not all payment processors do business in all parts of the world, or there may be extra hoops to jump through for users outside North America (and sometimes for those outside of the United States).

In choosing an online payment processor for your nonprofit, you’ll also likely want to take a hard look at these 3 factors:

1. Trust
2. Ease of use
3. Cost

The first two considerations here are important from your organization’s perspective, but even more so from that of your supporters who’ll be trusting the service with their personal and financial information.

Trust

Just as a “brand name” product can engender trust in a consumer, compared to a product they’ve never heard of, a payment processor that’s familiar to your supporters is likely to give them greater confidence in making online payments.

When you think of buying and selling online, which services come to mind as having a solid reputation?

Ease of use

Ease of use is a huge factor — if the payment process is a big hassle for you to set up and manage, there may be an investment in time and/or tech support that’s more than you can
manage right now.

Further, a membership payment or donation may be abandoned before it’s completed if the process is not quick, simple and relatively painless from the online donor’s perspective. Users will be quick to abandon a payment if they are uncertain about what they’re doing for fear of making a costly mistake.

Sometimes, “trust” and “ease of use” come together to create a barrier to donation.

Cost

In a recent TechSoup discussion of online payment processors, one nonprofit reported paying more than $100 in transaction fees for an event that brought in $2000 — obviously a significant cost!

Another nonprofit group, Sacramento Loaves & Fishes, found a clever way to share the costs  — they  added a custom field to their donation page, giving supporters a chance to choose to pay the processing fees on their donations. This may require a greater level of technical expertise than is available to many small nonprofits on a tight budget, but it’s an interesting approach that may be worth looking into.

What works best for one organization may not work as well for another, with different patterns and volumes of payments. Analyze your business and see what you come with!

BLP provides excellent Merchant services for small businesses, with plans targeted to your industry. Contact us today!

Non Profit Top Tip: Create a Monthly Preauthorized Giving Program

Would you like to reduce your fundraising costs, increase the lifetime value of your donors, while making it as easy as possible for your donors to give on a regular basis? It may seem too good to be true, but by creating a successful preauthorized gift program, you really can achieve all these benefits for your organization.

What are Preauthorized Gifts?

Preauthorized gifts (also called recurring, monthly, sustaining or regular giving) are just pledges for which the donor has authorized your organization to automatically collect a specific amount each month (or other cycle). The authorization could be for a specific length of time, or preferably could be for an indefinite period (e.g. perpetually until the donor elects to discontinue it). This, of course, means that your donors never have to make another decision whether or not to give.

Preauthorized gifts can be collected by several forms of electronic funds transfer (EFT), including payments by credit card or by a direct debit to the donor’s checking or savings account.

Although credit card payments tend to be more popular with donors, bank drafts (often known as ACH transactions because they are processed through the Federal Reserve’s Automated Clearing House (ACH) system) offer their own set of unique advantages, such as lower costs and no expiration dates.

Why Setup a Preauthorized Giving Program?

There are many benefits to developing a pre authorized giving program, according to Harvey McKinnon, author of Hidden Gold and a leading authority on monthly giving programs. His book provides the following list of some compelling advantages.

• Dramatically increase your annual income
• Build a better relationship with your donors
• Donors will keep giving longer
• Monthly giving revenue is predictable
• Lower your fundraising costs
• Income will grow over time
• Monthly giving is convenient

According to research sponsored by MasterCard International, only 3% of donors report using credit cards to make automatic donations, but 28% say they would probably or definitely consider making recurring donations if it were offered to them by their selected charitable organization.

The untapped potential in offering a preauthorized giving option is demonstrated by the success of organizations that have begun programs. Peace Action, for instance, currently processes thousands of preauthorized donations each month, averaging $30,000-$40,000 in gifts.

How to Implement a Recurring Donation Program

Establishing a successful program will require several steps:

• Educating your staff and donors about recurring donations via EFT.
• Developing solicitation methods to recruit recurring donations.
• Ensure you have the technology to easily manage & process recurring gifts.
• Testing of processes and procedures.

The Role of Technology

Perhaps the most important tool in creating and maintaining a successful recurring gift program is having what Harvey McKinnon calls an "efficient and responsive back-end system." This consists of a donor management system and EFT transaction processing.

Donor Management System

A good donor management system is much more than simply a database of donors and prospects. It must provide you the tools that make it quick and easy to handle the many tasks associated with your preauthorized gift program (as well as your other fundraising efforts), such as:

• Maintain complete donor/constituent information
• Track complete giving history with automatic calculation of gift summary by year
• Solicitation Generation/Tracking
• Gift/Pledge Management
• Reporting

EFT Transaction Processing

Although many nonprofits have begun to accept credit cards for either online or one-time donations, it is important to recognize that preauthorized recurring transactions are typically processed as a batch and therefore they have some unique attributes. You certainly don’t want to waste time and increase the chances of error by entering credit card numbers and amounts into a credit card terminal each month. As we have also noted, you will probably want to offer the option of payments by direct debit (ACH), which require a different type of processing account.

Beware of EFT processing solutions that do not integrate with your donor management system. Although they may allow you to automate the process of generating and collecting the transactions, you are likely to be giving up several important benefits.

Conclusion

A recurring donations program is a great way to increase the lifetime value of your donors while reducing fundraising costs and efforts. Developing an effective recurring donation program requires you to properly educate staff and donors, carefully target and test solicitations to attract participants, and ensure that you have efficient and responsive back-end systems (donor management and transaction processing) to minimize administrative effort. Although success may take time and effort, the end result is well worth it.

Happy Holidays from your friends at BottomLine Pros, LLC

As the year ends, we think about all of our customers and how important they are to us. We are aware of the many choices that are available and that is why we are so grateful that you chose our company because of the remarkable services we have to offer.

To all our valued customers and friends, BottomLine Pros, LLC would like to thank you for being a part of what makes this company so successful. Wishing you and your family a festive holiday season and a prosperous New Year.

Our office will be closed on Wednesday December 25th. However, we will receive our messages. We’ll be back in the office on Friday morning to serve all your payment processing needs, while saving you money.

We are delighted to have you as a customer, and we look forward to serving you in 2014.

May peace, joy, hope & happiness be yours during this holiday season and throughout the new year!

Point Of Sale System From BottomLine Pros LLC

Point of sale (also called POS or checkout) is the place where a retail transaction is completed. It is the point at which a customer makes a payment to the merchant in exchange for goods or services. At the point of sale, the retailer would calculate the amount owed by the customer and provide options for the customer to make payment. The merchant will also normally issue a receipt for the transaction.

BottomLine Pros LLC offers complete POS that will help you manage your sales. For more information visit their website http://bottomlineprosllc.com/ .

How Do I Know Which Merchant Services Provider To Choose?

Even the individuals that have a great understanding finance may have trouble navigating the complexities of merchant processing. Between the varying fees, equipment costs and the time it takes to acquire funds, every merchant processor is different. Though it can be confusing, this is actually good for your business if you play your cards right. It means that all of these factors can be negotiated. If you don’t have the time or inclination to bother negotiating with banks and processors, you’re in luck. There are firms that can negotiate on your behalf. When it comes to credit card processing, the rule of thumb is to think small. Small consultancies can save you money and give you better service than larger, big business providers!

Here’s how:

They know the market and can navigate it on your behalf. Look for a firm that has access to multiple processors as opposed to being affiliated with one processor or bank. Consultants with access to a variety of processors will work for you to negotiate fees based on factors such as volume processed, whether the business is new or established, credit history, industry and transaction method (online/in person/by phone/mobile/etc). Having access to multiple processors allows these consultants to compare processors and force them to compete for your business.

They can keep you out of contracts and help you eliminate unnecessary expenses. Processors know they can turn a larger profit on small merchants by requiring contracts and tacking on setup fees, annual fees and equipment leases. These terms are also negotiable. A consultant’s knowledge of the industry and bargaining power will help you avoid these additional costs. You benefit by saving money and larger processors like to work with these smaller consultants who will take great care of your business.

They monitor industry fluctuations in fees and rates to insure that yours stay competitive. And if the size or scope of your business changes, consultants can help you renegotiate the terms of your agreement or find you a processor that better suits your needs.

Using a consultant will not cost you any more. The margins that consultants earn are typically very small and are no different than what their competitors who represent banks or the big name credit card processors will cost. Unless you’re processing millions of dollars per month or have more than 100 locations, you will save by going through a small consultant who is more concerned with winning and keeping your business, rather than gouging you on your pricing because it’s challenging to understand and in turn, lock you into a long-term agreement so you aren’t motivated to leave if/when you realize you’re being overcharged.

Consultants supplement the customer service that processors and banks offer. Because merchant processing involves such a large volume of transactions, bigger banks and processors are unable to provide personalized service. In most cases, they rely on Independent Sales Offices (ISOs) and Member Service Providers (MSPs) to handle their accounts. The problem with these organizations is a high turnover rate; the number of representatives and depth of their industry knowledge is inconsistent. The result is longer hold times and more call transfers for merchant customers. Though consultants do not replace the ISOs and MSPs, they can avoid obstructions by connecting their customers with the right people. If you’re a small business, think twice before you go with a big bank for your credit card processing needs. By leveraging the knowledge and bargaining power of a small consultancy, you’ll gain access to better service and savings that can make a big difference for your profit margin. Lastly, when you support small consultancies, you support small businesses like your own.

Keep these thoughts into consideration and choose your Merchant Service provider wisely for the new year!

Gift Cards: Ways to Save Money For The New Year

Gift Cards and Loyalty Cards can provide a commanding way for smaller companies to compete. The fact is, what you get out of a gift and loyalty program will depend on the effort and commitment you invest.

Gift and loyalty cards can be an influential way to grow sales and retain customers. Today, even smaller companies can take advantage of these benefits, but they must be ready to implement them creatively and aggressively.

Once again, gift cards are the most requested gift, making Santa’s sleigh lighter this holiday season.

A gift card is a restricted monetary equivalent or scrip that is issued by retailers or banks to be used as an alternative to a non-monetary gift.

If you are looking to buy gift cards for friends and family, here are a few tips to help you save some green on those plastic purchases.

1. Buy Discounted Cards

2. Look for Promotions from Local Retailers

3. Shop With Reward Points

4. Never Pay for Shipping

5. Sell Unwanted Cards

6. The Classic Regifting

With these points you’re sure to save a lot during the holidays and start the new year with a big saving!

Top 10 Considerations For 2014 Budgeting In Check Processing

As we end another year of relatively stable check volumes in the financial industry, there are a number of cost-effective alternatives with excellent and proven return on investment which should be strong considerations for your 2014 budget. Although there is a decline in check volumes, it’s a stable decline, which implies predictability and less risk. Also, as product adoption curves, the distributed capture points increase and a financial institution can better plan for significant improvements for each workflow.

Several of these considerations include:

1. Efficiencies in Branch and Centralized Workflows: Pure multi-engine recognition technologies deliver over 90% read rates, while blended full automation solutions go to 98%+. Is your organization still spending time with data entry? If so, now is the time to end this process.

Balancing can still add a burden to check workflows due to older recognition technologies. Cut balancing overhead by 50%+ with new technologies.

Customer Retail Experience: New recognition technologies deliver virtually 100% read rates on retail transactions. By delivering straight-through-processing at the teller line.The cross sale process is easier, the overall experience is improved and the employee operation is simplified.

Treasury and RDC: There are a wide range of RDC implementations, but one constant remains; if the customer has over 30 checks, they are typically rebalancing every transaction. Eliminate this step by delivering only a single misread per 500 items.

Mobile RDC: The user experience continues to improve with this approach; however, many in the industry claim success rates of only 70%. Leverage a 2nd recognition engine strategy and boost this number to closer to 95%+. Think of how the adoption will improve with this kind of approach.

Check Fraud: “Long live check fraud” might be an appropriate claim as banks budget to “live with” losses and focus on other workflows. Significant improvements have been attained just over the past several years which can be applied to real-time teller transactions, RDC as well as mobile. Prices for image analysis solutions have declined, and are much more attractive than a few years ago.

Corporate Fraud: Payee Name Verification (PNV) as an add-on to Positive Pay systems has been a very active market. Both community and regional financials are now offering this service to compete with big banks.

Data Mining and Big Data: Several banks have been testing the ability to use payee and payer information from checks within their big data solutions. This is a bit less proven

than the other areas, but has a great potential upside.

Verify Amounts: Many checks come to the paying bank with incorrect amounts on them. You don’t know about it until customers complain. Locate and correct these items before they hit your retail and corporate accounts.

Endorsement Validation: The coolest feature hardly ever utilized in the industry is Automated Endorsement Analysis. With the risk of depositing items twice in RDC increasing, this single capability can become a game changer.

Distributed Recognition Reporting: Another mystery to many banks is the automation levels of distributed capture points. Managed Recognition can be utilized to help solve this management issue.

2013, 2014, 2015… The future of straight-through-processing of checks remains an elusive target for many banks. However, improvements in technology, along with strong market forces for cost-effective pricing models, now deliver exceptional tangible and intangible value with immediate savings in a wide range of workflows.