If you run a nonprofit organization with limited resources, you know how important it is to save money. While there are many ways to cut costs – like buying reusable fundraising materials, recruiting volunteers, using local suppliers, and renting technology you only need temporarily – many organizations don’t consider optimizing their payment system to reduce their nonprofit’s credit card processing costs.
While funneling donations through an online payment portal is nothing new, it’s important to use the right merchant account providers and credit card processors. After all, some offer discounted rates for nonprofits, whereas others offer solutions designed specifically to help nonprofits collect donations – including tools to make fundraising easier. For example, while some nonprofits need the ability to collect additional information about donors and sponsors for future fund drives, others prefer setting up automatic recurring payments.
Continue reading to find out which credit card processors are best suited for handling payments to nonprofits and online fundraising. Whether you run a small local charity or a large organization, one of these processing services is sure to fit your needs.
Best Credit Card Processing for Nonprofits
While it’s important to select a payment processing provider that offers lower processing rates for nonprofits, you may also want to consider providers that make it easy to take credit card payments and other donations online. Here are some of our top picks:
Paypal – for low-volume retailers
People are more likely to donate if PayPal is an option, according to a study by IPSOS – a multinational market research and consulting firm. On top of that, PayPal offers discounted online processing rates for confirmed charities and in-person donations get the standard PayPal Zettle mobile processing rates.
Paypal rates:
Swipe, chip, and tap transactions – 2.29% + $0.09
QR code transactions $10.01 and above – 1.90% + $0.10
QR code transactions $10 and under – 2.40% + $0.05
Online credit and debit transaction –: 2.99% + $0.49
Online PayPal and Venmo checkout – 3.49% + $0.49
Keyed-in transactions – 3.49% + $0.09
Virtual terminal – 3.09% + $0.49
To get the discounted processing rate, you need to sign up for a PayPal business account and register your nonprofit. To qualify, your charity must also be registered with the IRS as a 501(c)(3).
One of the great things about PayPal is that they offer donation processing via QR code scans on your phone. You can also easily add a “Donate with Paypal” button to your website or even your social media page.
The only downside to PayPal is the processing fee is on the high end if most of your donations are in smaller increments. For example, a $10 online donation will cost $0.69, but many feel having the security and clout of PayPal is worth the additional fees.
Square – for mobile businesses
Perfect for small charities that want to get up and running quickly, Square is one of the best processors for small organizations due to its simplicity. However, there are no special discounts for nonprofit organizations.
But since there are no special rates, you won’t have to prove your charity status or complete other applications to get started on Square.
Square rates:
In-person – 2.6% + $0.10
Online – 2.9% + $0.30
Over the phone/key-in – 3.5% + $0.15
On top of that, there are no monthly fees for processing payments with Square. So if you don’t process anything in a certain month, you won’t pay any fees whatsoever. This makes Square ideal for small seasonal charities.
Although Square doesn’t offer special rates, it does offer one of the most powerful free POS (Point of sale) tools. With Square, you’ll have access to features like free mobile processing, a payment gateway, a virtual terminal, and an online store.
There are multiple ways to accept donations with Square whether you want to swipe cards in-person, pay with a card online, add buttons to social media and your website, or via a payment link.
Stripe – for online businesses
One of the most flexible payment processors for internet online businesses, Stripe is perfect for larger e-commerce businesses, in-app purchases, and online stores that accept global payments.
Stripe rates:
2.9% + $0.30 per transaction
Additional 1% for international payments in any currency
Stripe is known for having a lot of advanced API (application programming interface) tools that allow complete customization of your checkout experience. If you have a developer, it can be customized with a variety of programming languages.
The main focus of Stripe is to ensure its e-commerce merchants have robust storefront and billing features. In fact, some users use Stripe just for these features rather than simply for payment processing.
Stripe also has integration with dozens of online shopping carts like Shopify, WooCommerce, and X-Cart. It also has special integrations for B2B (business-to-business) organizations.
With hundreds of apps and extensions for features like invoicing, accounting, marketing, and operations, it’s no wonder Stripe is one of the most popular payment processing services available today.
The only drawback is its complexity. If you don’t have developer resources, the number of customizations offered may be overwhelming to some small businesses – and unnecessary for businesses that don’t require advanced customization.
Payline Data – for businesses who make $5,000+ per month
Payline Data is a full-service merchant account that offers an interchange-plus pricing structure – perfect for businesses of all types and sizes. While the rates are not the cheapest, it accepts small businesses and is perfect if your organization is somewhere between a mobile store and a large established business.
Payline Data rates:
Card present – Interchange + 0.2% + $0.10
Online transactions – Interchange + 0.40% + $0.20
+$20 monthly fee
+$10 monthly fee for virtual terminal
Payline Data offers reliable credit card processing services that generally come out cheaper than flat-fee structures like Square, especially if you have a higher donation volume. Payline also offers special discounted processing rates for non-profits (in addition to healthcare and medical providers).
If you want to try it out, Payline Data offers a two-month free trial. If you decide you like it, Payline Data offers only month-to-month contracts with no early termination fees.
Dharma Merchant Services – for businesses who make $10,000+ per month
While Dharma Merchant services offer some of the lowest credit card processing rates available on the market, they only work with higher transaction volume merchants. So it’s best to use Dharma only if your organization receives at least $10,000 in donations per month.
Dharma Merchant Services rates:
Storefront – Interchange + 0.15% + $0.08
Online – Interchange + 0.20% + $0.11
Restaurants – Interchange + 0.15% + $0.08
+$25 per month
*Discounts for businesses processing over $100k/month
Dharma Merchant Services has transparent low rates – plans are separated into whether you have a retail store, e-commerce store, or restaurant. Additionally, all accounts get access to the MX Merchant gateway, which includes a virtual terminal, customer database, invoicing, and recurring billing features. The MX Merchant gateway also offers integration with most major shopping carts.
The only drawbacks with Dharma Merchant Services are that the funding time is 2 business days (longer than most companies that offer next-day funding), month-to-month billing with a $49 account closure fee, and the fact that they only do business with organizations that make over $10,000 a month.
Stax by Fattmerchant – for businesses who make $15,000+ per month
If your company is taking in over $15,000 in credit card donations per month, it may be advantageous to look into a subscription-based merchant provider like Stax by Fattmerchant. Stax does not charge a per-transaction markup – you only pay direct interchange costs on your transactions plus the monthly subscription fee, which can be a good option for mid-sized businesses.
Stax by Fattmerchant rates:
Subscription fees: Growth – $99 per month
Pro – $159 per month
Ultimate – $199 per month
Interchange + $0.00 per transaction
Custom rate for over $500,000 annually
Stax offers a good combination of features and price. With its integrated payments platform and robust tools, you’ll be able to handle mobile and online payments, invoicing/recurring billing, a customer database, inventory, and employee management. Stax by Fattmerchant also has advanced analytic tools to identify and compare sales trends. It also offers developer APIs in order to create your own custom shopping cart solution for your website, application, or software.
The only cons are the extra fees for add-on features like payment gateway and recurring billing on the lower subscription tiers.
Selecting the best payment processing company
When comparing payment processing companies, consider the following factors:
Pricing structure – Payment structure can be complex as there are several pricing models. A new or micro business will probably do best with a processor that has flat-rate pricing. However, a large business owner should take advantage of interchange-plus or monthly subscriptions.
Add-ons – It’s important to keep an eye out for additional fees like setup fees, PCI compliance fees, and statement fees. Certain providers also charge extra for virtual terminals and payment gateways, while others cost more for fraud protection or subscription billing.
Monthly minimums – A new business should choose a company without minimum requirements since some processing companies charge a fee if you don’t meet the minimum monthly processing dollar amount.
Contract terms – Make sure to read carefully to make sure there are no long-term commitment requirements or termination fees. Thankfully, most credit card processing companies offer month-to-month contracts, so you’ll have the flexibility to cancel without having to make a long-term commitment.
Cost of equipment – Certain credit card transactions require the proper hardware. While few offer devices free of cost, some companies offer the option to buy payment processing equipment outright or on a lease. However, renting is a popular option if you’re looking for mobile credit card processing devices without a commitment.
PCI compliance support – Merchants must comply with Payment Card Industry Data Security Standard. Your processor should help you with achieving PCI compliance, otherwise, you’ll have to handle it on your own.
Customer support – Make sure the company you choose to process payments has decent customer service. After all, if you have a problem or question, you’ll want to be able to reach someone.
The bottom line is: make sure you test out multiple processing services before deciding which one is right for you. Additionally, you can read user reviews or informative blog articles like this one.
Payment Processing Equipment rentals
It’s a great time to host fundraising events as the events industry gets back into full swing with an expected boost in fundraising events for nonprofit organizations.
Whether you’re expecting 50 attendees or 50,000, the right mobile processing equipment combined with the right credit card processor allows you to accept credit cards or contactless payments at your booth or on the go.
For smaller events, after your equipment arrives at a time and destination chosen by your organization, Rentacomputer.com can have your point of sale (POS) up and running in minutes.
If you have a large crowd to contend with for large events, Rentacomputer.com will make sure your organization is equipped with enough tablets and POS equipment to process payments efficiently and keep lines moving.
A Tech Travel Agent from Rentacomputer.com will assist you in every step of the way, from choosing your POS hardware and accessories – like mobile hotspots, cellular data connected tablets or smartphones for processing and USB printers for receipts, to delivery, to downloading the right Point of Sale application on your device in order to start processing payments, in addition to returns and troubleshooting services. Rentacomputer.com can also preload your tablets with any software you want to use, so all of your devices have the same applications and capabilities upon arrival – making it even easier for you.
Are you considering technology rentals for your fundraising event? Our account manager Randy Moore specializes in laptops, tablets, smartphones, internet hotspots, accessory rentals, and much more. Randy will gladly handle any questions you may have in regards to rentals to make your fundraiser easier. Contact Randy today at 1-800-736-8772 ext. 225 or fill out a fast, easy online quote form today.
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