A credit card is simply a small plastic card that allows you to acquire your desired commodity easily on a credit-based system. It’s a flexible financial tool that also allows you to make the best of offered services, like a point-based reward system or even building credit scores.
It’s very important for nonprofit organizations because of the flexibility it provides the donors with. If your nonprofit outfit is looking to explore its credit card options, here are some credit card processing options that your nonprofit can choose from.
Merchant accounts are bank accounts that allow businesses to accept payments using (but not limited to) debit or credit cards. You can sign up for it from any bank or credit card company of your choice. We recommend opting for a specialist nonprofit payment processing service that will suit your needs.
You have to be mindful of the set-up fees and per-transaction fees involved because they are often hidden in the fine print of the agreements. Since they vary, you should look for packages aimed at nonprofits because they are cheaper than those designed for business interests.
With merchant accounts, your organization’s name will appear on the donor’s credit card statements. If everything checks out, there should be no delay in receiving your organization’s fund.
Conversely, the fee structures and variance of costs can be frustrating. It also takes time to complete the documents and requirements needed by the bank in order to open an account.
Third-party processors use their merchant accounts to accept donations on behalf of others. They then relay the donations to their clients after taking a cut for themselves. Some third-party processors specialize in nonprofit credit card processing, so this is a great option if you are averse to merchant accounts.
Such processors offer an integrated website which you can send your acknowledgment messages from and refer donors to. You can also brand the website pages if you choose to.
Using third-party processors is considerably inexpensive and easy to set up and manage, especially when handled by a specialist nonprofit payment processing agents. The downsides are that your organization’s name may not appear on your donor’s credit card statement, and you may have to write their information into your financial records manually. Then, there may be delays in getting the funds into your account.
Dedicated Nonprofit Credit Card Processing Programs
These programs are designed for fundraising purposes and are similar in operation to merchant accounts. The difference here is that they offer additional services like integrating with your financial systems and websites and managing your relationship with them.
It is a popular option with lots of successful nonprofit organizations because their processes are tailored to their customer’s needs. Also, they manage customer relationships and offer integration of financial systems. However, they may not be the best option for small organizations since they are quite pricey.
Another issue is that there are not many companies that offer this kind of service.
Even though some aspects may seem challenging, companies offer multiple options that might suit your needs.