If your nonprofit handles online financial transactions, you will need to offer credit card processing. This can include online donations, selling tickets to fundraising events, selling sponsorship opportunities, hosting raffles, and much more. After all, almost every online exchange of money these days happens via debit or credit card. If you only offer traditional forms of payment (check or cash) you are likely going to miss out on a huge opportunity for additional revenue.
Factors to consider when selecting a merchant service provider
When selecting a merchant services or payment provider, consider the following factors:
1- Credibility
Be sure to partner with a certified payment processor company with experience, positive testimonials, and good ethical values. Many merchant service providers exist, so if someone can’t prove their credibility…move on. There are way too many credit card scams to partner with someone who isn’t qualified.
2- Onboarding
How easy is it to start processing payments? Is there an easy way to apply online? Do they provide a customer service rep to answer your questions and help walk you through the application process? While all merchant services providers must walk potential clients through a KYC (Know Your Client) onboarding process, many now have same-day onboarding.
3- Credit Card Processing Fees
Every merchant service provider charges a fee for processing credit card transactions. However, the range of credit card processing fees can vary considerably (from 1% – 20%). There are different fees for different types of transactions and credit cards. There are fees based on the industry and you may be eligible for a nonprofit or charity discount. Be sure to understand the fees involved before signing up.
4- Hidden Fees
In addition to transaction fees, there may be monthly service fees, gateway fees, minimum charges, costs for mobile processing, late fees, fees for customer support, and early termination fees. Be on the lookout for all of these.
5- Contracts
Some companies require that you sign a contract, binding you to use the service for one year or more. If the service doesn’t work out, they then charge termination fees. Take note and possibly “avoid” these companies. Binding customers to a contract and threatening fees for leaving isn’t a great way to build a loyal customer base. How about looking for a company that provides competitive rates and honest, exceptional service instead?
6- Credit Card Equipment
What type of credit card equipment is available, and does it meet your needs? Will you only be processing donations via your website, or do you need a point-of-sale system or a mobile processing app that attaches to your phone? Find out what type of credit card processing equipment is offered and what it costs. Some companies may charge hundreds of dollars for equipment, whereas others may offer it for free.
7- Incentives
As with many businesses, merchant services have become an extremely competitive field. There are lots of options from the basic service of PayPal to the custom Mom & Pop shop that offers credit card processing for one niche business. Ask for incentives and limited time offers.
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