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| Credit Card Processing For Nonprofits |
By:
John Parker |
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For quick collections and larger donations, many non profit organizations has started accepting donations through credit cards. Donors also appreciate this as they find it more convenient than the usual form of donating through cheque or cash.
Before considering donations through credit card for your NPO, you must weigh a number of factors. Like, pondering over the type of transactions you are most likely to encounter: recurring (such as monthly pledge payments) or one-time only, donor initiated (such as through your website) or with payment information entered by staff.
One must evaluate the likelihood of having a physical credit card for you to swipe, and also whether payments are for donations alone or involve a service like an event ticket or fund raising premium.
There are a number of options for nonprofits when selecting a credit card processor. Choice of processing technology depends upon the selection of mode of payment. For example, in the case of a recurring monthly gift, you probably will not want to have to enter each donor's credit card information and payment amount into a credit card terminal each month. One of the most beneficial uses for electronic payment is automating the fulfillment of pledge payments or monthly giving programs.
There are some credit card processing solutions that do not require a you to own a merchant account. Instead of that, you will be require to establish a merchant account in the third-party name to process your transactions. But unless your organization only processes a few credit card transactions a month, it is generally better to have your own merchant account.
One of the downsides of using a third party processor is that the name that shows up on the donor's credit card statement is not that of the intended nonprofit. When this happens, it is possible for the donor to be confused and to even protest the charge, sometimes resulting in a chargeback. The question for your nonprofit is whether the possibility of confusion is outweighed by the ease of setting up and managing the account.
Other problems include the Lag time in getting funds into nonprofit's own bank account, delayed receipt of funds, since processors usually only mail payments once or twice a month, as well as the risk of non-payment should the third-party processor fold. Finally, most third-party processors lack the flexibility to customize their payment forms, which can restrict your organization's ability to collect important information, such as the name of a person being honored for a memorial or honorarium.
While comparing with other merchant account services providers, nonprofits should weigh the various costs included in that, ranging from the one-time to the ongoing. Such costs may include one-time fees for setting up your merchant account, a monthly account fee, transaction fees per item and a discount rate that is a percentage of the transaction amount, as well as indirect costs such as the time needed for staff to enter credit card data.
Choosing to accept credit card donations can give a major boost to your NPO. While considering the options, always remember that the simplicity, security, and administrative efficiency of your online process are the only key features that leads to a successful solution for accepting electronic payments.
Browse through www.paynetsystems.com to get more information about how to apply online through Credit Card Processing. |
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