It is no secret that we live in a digital world. People go online to purchase products, pay their bills, and socialize. In order to maximize charitable giving for your nonprofit, you have to meet your potential donors where they already are. If you aren’t accepting online donations, you could be missing out on much-needed revenue. By looking for the best online payment systems for nonprofits, you can make the process simple and easy for your donors. Here’s how.

What Are The Benefits Of Online Payment Systems For Nonprofits?

There are several reasons why online nonprofit donation processing is so beneficial. First, you make the giving process easy for your donors. They log on, select a dollar amount, enter in their credit card information, and finalize the contribution. This is the convenience they’re looking for.

Not convinced? Consider the following charitable giving statistics:

  • 54% of donors worldwide prefer to give online with a credit or debit card
  • 51% of high-wealth donors ($200k+) prefer to give online
  • 67% of nonprofits across the globe accept online donations

The proof is in these numbers. While donations are critical to your nonprofit’s success, you also reap the benefit of saving important donor information when they make a donation online. With online nonprofit donation processing, you can easily store donor details for future communication. It won’t be a single dollar at a booth: you’ll be building a long-term relationship with your donor.

And, you don’t have to stop at accepting donations. Online payment systems for nonprofits can also help your team sell merchandise. From t-shirts to coffee mugs, make it easy for donors to purchase these items that help spread awareness about your cause. Planning a charity gala or fundraising event? Online payment systems for nonprofits also allow for ticket purchases.

For more information about these benefits, check out our post on credit card processing for nonprofits.

How Do Nonprofits Accept Donations Online?

Starting a nonprofit based on your passion is one thing; getting the sustained funding you need is another. Online options make it easier, but how do nonprofits accept donations online in the first place? You have a few options.

These are the key features, terms, and benefits you should know about as you browse online payment systems for nonprofits. You may set up all of these systems to accept payments, or only select ones.

Establish a nonprofit payment gateway

When an online payment is initiated, a payment gateway authorizes the transaction, securely encrypts it, and submits it for processing. As the communication portal between the nonprofit and donor, payment gateways handle a significant amount of information needed for secure online donations.

In the case of an eCheck or ACH transaction, a funds request is sent to the payer’s bank. If sufficient funds are available, the funds are deposited into your bank account. For credit cards, an authorization request is sent to the card-issuing bank to verify that the card is valid. The transaction is then submitted to the credit card processor who deposits the funds into the merchant’s bank account.

Looking for recurring donation options? Payment gateways for nonprofits make it easy to handle all of these types of donations in one streamlined tool.

Set up a merchant account

A merchant account is a type of business bank account that allows you to accept debit and credit card payments. When it comes to merchant accounts for nonprofits, there are generally two ways to get a merchant account.

  • Option #1: Enter into an agreement with a member bank that has a processing relationship with a credit card company, like Visa and Mastercard.
  • Option #2: Enter into an agreement with an authorized agent of the member bank, such as an independent sales organization or member service provider (ISO/MSP).

Both of these come with varying levels of fees, benefits, and features. As you consider your options, think about your needs and compare different providers. This will help you find the right fee structure for your organization. 

Since these accounts can be complex, we encourage you to read our full guide to merchant accounts here.

Consider a virtual credit card terminal

Virtual credit card terminals give nonprofits the ability to accept credit cards at more affordable rates. With this solution, your merchant account will allow you to accept “card not present” transactions at a lower qualified rate. This is often a full percentage point lower than a non-qualified rate on a card reader.

So how does it work? A typical virtual credit card terminal transaction from start to finish would be:

  • Your customer or client provides credit card, debit card, or ACH details by email, physical mail, or phone
  • You log in to your virtual payment terminal and enter in the necessary financial information
  • The payment is processed through the virtual terminal
  • You complete the form and all parties receive confirmation of a successful transaction

All you need is access to a computer, tablet, or smartphone once your virtual terminal is in place. Learn more about virtual credit card terminal benefits here.

Do Nonprofits Pay Credit Card Fees?

If you’re ready to set up nonprofit donation processing, you may be wondering, do nonprofits pay credit card fees? Whether you are accepting credit card payments online or in person, there will still be a fee for each transaction. In general, this is usually somewhere between 2-3% per transaction. However, rates can be as low as 1% or as high as 5%.

How can you reduce these fees? Some nonprofits include a second donation line asking donors if they’d like to cover the cost of the processing fee. This passes the fee on to your donor.

Or, when you work with a dedicated provider of online payment systems for nonprofits, you’ll have additional options to find an affordable rate made for nonprofits. For example, our team at PaySimple is dedicated to finding the lowest credit card fees for all of our charitable organizations.

How To Find The Best Payment Gateways For Nonprofits

PaySimple gives you the power to accept online donations wherever you and your donors happen to be. Even when you use multiple payment methods and locations, PaySimple tracks them all and ties them back together within our single integrated solution. It’s really that easy!

For a real-life example, take a look at Kinsley’s Cookie Cart, a foundation that supports pediatric cancer patients and their families. Leveraging PaySimple’s tools, Kinsley’s Cookie Cart hosted two successful fundraising events and raised $125,000 in monetary support during their first year of operation.

Today, Kinsley’s Cookie Cart uses PaySimple to collect donations online, as well as at events using mobile swipers and iPads. For email communications, the foundation uses our MailChimp integration to send newsletters and event invites. PaySimple has enabled them to run a foundation with just one single solution for many business needs.

Are you ready to take your nonprofit to new heights? PaySimple can help. Let us take care of behind-the-scenes efforts so you can focus on your cause. Start your free trial today.

Start My Free Trial