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!