Best Payment Processor for Nonprofits

One of the most important aspects of running a successful nonprofit is having the right payment processing solution for seamless donation.

But the truth is, finding the right payment processing solution for your nonprofit can be a daunting task. With so many options and countless details to consider, it’s easy to get overwhelmed.

We’ve compiled this guide to help you find the best payment processor for nonprofits.

Most listicles we found online were either subjective or limited in scope.

It’s either based on who has the highest affiliate commission or was limited to just a few services.

 

 

Here’s what we’ve done:

First, we’ve stripped away the affiliate links and marketing messages; even ours, notwithstanding that we already have a product helping nonprofits save over $179,652.00 yearly on operational costs.

Then go back to the basics.

We created a comprehensive guide that covers five key payment processing concepts, outlines the dangers of online fraud, and explains what you should look for in an online payment processor.

Without further ado, let’s dive in.

 

Key Takeaways

• Nonprofits need a reliable payment processor to accept and process online donations securely.
• Payment processing basics include payment gateways, merchant accounts, and payment processors.
• Online fraud is a significant concern for nonprofits, and payment processors must have robust security measures to prevent fraud.
• The five payment processing concepts are authorization, settlement, chargeback, refund, and recurring payments.
• When choosing a payment processor for nonprofits, key features include security, ease of integration, reporting, customer support, and donation receipts.
• Payment Processing Basics for Nonprofits
• As a nonprofit, understanding the fundamentals of payment processing is crucial for managing donations and ensuring a smooth experience for your donors.
• Payment processing involves accepting, verifying, and settling transactions, whether they occur online or offline.
• It also involves payment solutions working together to process and complete the transaction, including payment gateways, merchant accounts, and payment processors.

 

Key Components of Payment Processing

1. Payment Gateway

A payment gateway is a service that securely transmits donation information between you, the nonprofit, the donor, and the payment processor.

It encrypts sensitive data, such as credit card numbers, to protect it during transmission.

Payment gateways are vital for online donations and e-commerce fundraising activities.

2. Payment Processor

The payment processor handles the transaction and facilitates communication between the parties involved.

It checks the transaction’s validity, verifies the donor’s payment method, and ensures the nonprofit receives the donation.

3. Merchant Account

A merchant account is a unique bank account that enables you to accept and process electronic payments.

When a transaction is approved, the funds are transferred from the donor’s account to the merchant account before being transferred to the nonprofit’s regular bank account.

4. Issuing Bank

The issuing bank is the financial institution that provides the donor with their credit or debit card. It is responsible for approving or declining transactions based on the donor’s available balance and credit limit.

5. Acquiring Bank

The acquiring bank is your bank, which receives and processes transactions on behalf of the nonprofit. It works with the payment processor to ensure that funds are transferred securely and accurately.

 

Payment Processing Basics

Once the payment information has been transmitted, there are five primary steps in the payment processing cycle: authorization, authentication, approval or decline, settlement, and transaction fees.

• Authorization: First, the donor provides their payment information, such as a credit card number, to initiate a donation. This information is securely transmitted to the payment processor via the payment gateway.
• Authentication: Next, the payment processor verifies the donor’s payment method by communicating with the issuing bank. The issuing bank confirms whether the donor has sufficient funds or credit to complete the transaction.
• Approval or Decline: The issuing bank will either approve or decline the transaction, depending on the authentication outcome. This response is returned to the payment processor, relaying the information to the payment gateway.
• Settlement: Once the transaction is approved, the funds are transferred from the donor’s account to a merchant account maintained by your bank. The payment processor informs the payment gateway that it has received the funds and is ready for settlement.
• Transaction Fees: Finally, a small percentage of each transaction is held back as a fee for the payment processor and other service providers. The remaining funds are then transferred to your nonprofit’s bank account.

With the basics of payment processing in check, you can ensure that your donors have an easy and secure experience when donating to your organization.

Additionally, you can avoid any unexpected costs or delays associated with processing donations.

Beyond payment processing, something else plagues the nonprofit sector – fraud.

 

The Dangers of Online Fraud

Online fraud is a growing concern for all organizations, including nonprofits.

With increasing donations and transactions occurring online, you need to be aware of the risks and take proactive measures to protect your donors and organization.

This section will discuss the dangers of online fraud and provide recommendations for safeguarding your nonprofit against malicious activities.

Common Types of Online Fraud Targeting Nonprofits

• Phishing Attacks: Cybercriminals may use phishing emails to impersonate your nonprofit, trick donors into providing sensitive information or donating to fake accounts. These emails often look legitimate, using your organization’s logo and branding.
• Donation Page Cloning: Fraudsters can replicate your nonprofit’s donation page to deceive donors into submitting payment information on a malicious site. This allows them to steal donors’ personal and financial information.
• Payment Fraud: This involves unauthorized transactions using stolen credit card information. Cybercriminals can use these details to make fraudulent donations, which can later be disputed by the actual cardholders, resulting in chargebacks and financial losses for your nonprofit.
• Account Takeovers: Cybercriminals can gain unauthorized access to your nonprofit’s accounts, including email and payment processing accounts, by exploiting weak passwords or using phishing techniques. This can lead to financial theft, data breaches, and damage to your organization’s reputation.

How to Protect Your Nonprofit Against Online Fraud

• Secure Your Donation Platform: Choose a reputable payment processor and gateway that prioritize security features, such as encryption, tokenization, and fraud detection. These systems will help protect sensitive donor information and reduce the risk of unauthorized transactions.
• Educate Donors: Inform your donors about the importance of online security and guide how to identify phishing emails, secure websites, and other potential threats. Encourage them to verify the legitimacy of emails and websites before donating.
• Implement Multi-Factor Authentication (MFA): Require MFA for accessing sensitive accounts, including email, payment processing, and donor management systems. MFA adds an extra layer of security by requiring additional verification, such as a temporary code or biometric data, alongside a password.
• Regularly Monitor Transactions: Monitor incoming donations and watch for unusual patterns or activities. This may include multiple small donations from the same source, sudden spikes in donation amounts, or donations from high-risk locations. If necessary, investigate suspicious transactions and report them to your payment processor and authorities.
• Stay Up-to-Date with Security Practices: Continuously review and update your nonprofit’s security policies and procedures to stay ahead of emerging threats. Ensure that all employees and volunteers are trained on these practices and understand the importance of cybersecurity.

By understanding the dangers of online fraud and taking steps to protect your nonprofit, you can create a secure environment for donors and safeguard your organization’s reputation and financial stability.

Encouraging a culture of cybersecurity within your nonprofit will help mitigate risks and maintain trust with your donor base.

 

How do nonprofits accept payments?

Nonprofits can accept payments and donations through various methods to accommodate their donors’ preferences and maximize fundraising opportunities.

Providing multiple payment options can help increase donor engagement and simplify the donation process.

Here are some common ways for nonprofits to accept payments:

1. Online Donations

Online donations are increasingly popular, allowing donors to contribute from anywhere. Nonprofits can accept online payments through:

• Donation Forms on Your Website: Embed a secure donation form on your nonprofit’s website, allowing donors to enter their payment information directly. This option typically requires a payment gateway and processor to handle transactions securely.
• Third-Party Donation Platforms: Services like PayPal, Stripe, or other online fundraising platforms can process donations on your behalf. These platforms often provide donation buttons, widgets, or links that can be integrated into your website, emails, or social media campaigns.
• Crowdfunding Campaigns: Launch a crowdfunding campaign on platforms like GoFundMe, Kickstarter, or Indiegogo to raise funds for specific projects or causes. These platforms handle payment processing and often provide tools to help promote and manage your campaign.

2. Mobile Giving

Mobile giving allows donors to donate via smartphones or tablets, making it convenient and accessible. Nonprofits can utilize the following:

• Text-to-Give: Donors can send a text message with a specified keyword to a designated number to donate. Their donation is typically added to their mobile phone bill or deducted from their prepaid balance.
• Mobile Donation Apps: Develop a mobile app or use third-party apps, such as Givelify or Tithe.ly, to facilitate donations from donors’ mobile devices. These apps often include features like recurring donations, event registration, and push notifications.

3. In-Person Donations

While digital payments are becoming more popular, in-person donations are essential for many nonprofits. Options for accepting in-person donations include:

• Cash and Check Donations: Accept cash or checks during fundraising events, at your nonprofit’s office, or through the mail. Ensure proper procedures are in place for recording, depositing, and acknowledging these donations.
• Credit and Debit Card Payments: Utilize a point-of-sale (POS) system, mobile card reader, or contactless payment device to accept credit and debit card donations during events or at your office. This method requires a merchant account and payment processor to handle transactions.

4. Recurring Donations

Recurring donations provide a steady stream of income for nonprofits and can be facilitated through the following:

• Automatic Bank Transfers: Donors can set up automatic transfers from their bank accounts to their nonprofit regularly (e.g., monthly). This method requires donors to provide their bank account information and authorization.
• Subscription-Based Donations: Allow donors to opt for recurring donations when they contribute online or through mobile apps. Ensure that your payment processor or donation platform supports this feature.

By offering multiple payment options, you can cater to donors’ preferences and maximize their fundraising potential. Choosing secure and reliable payment processing partners is essential to ensure a smooth and trustworthy donation experience for your supporters.

 

Why You Need to Think About Payment Processing for Nonprofits

Payment processing is a crucial aspect of nonprofit operations. It directly impacts your organization’s ability to collect donations and fund your mission. Understanding and carefully considering payment processing is essential to ensure a seamless, secure, and efficient experience for your donors. Here are some reasons why payment processing should be a top priority for nonprofits:

1. Donor Convenience and Preferences

Multiple, user-friendly payment options can increase the likelihood of donors contributing to your cause. Provide various methods, such as online payments, mobile giving, and in-person donations, to cater to donors’ preferences and make the donation process more convenient.

2. Security and Trust

Payment processing security helps in protecting your donors’ sensitive information and maintaining their trust in your organization. By working with reputable payment processors and implementing strong security measures, you can prevent unauthorized transactions, data breaches, and potential reputational damage.

3. Recurring Donations

A reliable payment processing system enables you to accept recurring donations, providing a consistent stream of funds for your nonprofit. Donors who opt for recurring contributions often contribute more over time, making it essential to offer and manage this option effectively.

4. Fundraising Opportunities

Flexible and efficient payment processing allows your nonprofit to participate in fundraising events and campaigns, such as crowdfunding, peer-to-peer fundraising, and online auctions. Diversify fundraising channels to maximize your potential to raise funds and engage with supporters.

5. Cost and Resource Management

Different payment processors and platforms offer varying fee structures; some even provide discounted rates for nonprofit organizations. Evaluate and choose cost-effective payment processing solutions to minimize expenses and allocate more resources toward your mission.

6. Compliance and Reporting

Payment processing systems can help your nonprofit comply with financial regulations and simplify donation tracking and reporting. Accurate record-keeping and reporting are essential for maintaining tax-exempt status, donor acknowledgment, and transparency.

7. International Donations

With the right payment processing solutions, your nonprofit can accept donations from supporters worldwide, expanding your donor base and increasing your fundraising potential. International payment processing requires handling multiple currencies, local payment methods, and cross-border transaction fees.

With these, you can create a donor-friendly experience, maximize fundraising opportunities, and ensure the security and stability of your organization’s financial operations.

Researching and selecting the most suitable payment processing partners will help support your nonprofit’s mission and growth.

 

 

Key Features to Consider in Online Payment Processors for Nonprofits

Choosing the right online payment processor for your nonprofit ensures a secure, user-friendly, and efficient donation experience. Here are some key features to consider when evaluating online payment processors:

1. Security

The security of your donors’ personal and financial information is paramount. Look for a payment processor with robust security features like encryption, tokenization, and PCI DSS compliance. Additionally, consider fraud detection and prevention tools to safeguard against unauthorized transactions.

2. Ease of Integration with Your Website

The payment processor should integrate seamlessly with your nonprofit’s website to provide a smooth and consistent user experience. Look for processors that offer easy-to-use APIs, plugins, or widgets that work with your website’s platform or content management system.

3. Integration with Fundraising Tools

Your payment processor should work well with your existing fundraising tools and platforms, such as event registration systems, crowdfunding platforms, and peer-to-peer fundraising software. This integration will help streamline your fundraising efforts and ensure a cohesive experience for your donors.

4. Integration with Donor CRM

Your payment processor should integrate with your donor relationship management (CRM) system to effectively manage donor information. This feature will allow you to easily track and analyze donation data, segment donors, and personalize communication efforts.

5. User-friendly UX

A user-friendly donation experience encourages donors to complete their transactions and increases the likelihood of future donations. Choose a payment processor that offers a simple, intuitive, and mobile-responsive interface to minimize donor frustration.

6. Reporting

Effective reporting tools are essential for tracking donation data, monitoring trends, and making data-driven decisions. Ensure your payment processor offers comprehensive reporting capabilities, including customizable reports, real-time data, and export options.

7. Scheduled or Recurring Payments

Recurring donations provide a steady source of income for your nonprofit. Look for a payment processor that supports scheduled or recurring payments, allowing donors to set up automatic donations regularly (e.g., monthly or quarterly).

8. Types of Payment Accepted

Your payment processor should accept various payment methods, such as credit and debit cards, digital wallets, bank transfers, and even international currencies. Multiple payment options increase the likelihood that donors can contribute using their preferred method.

9. Customer Support

Responsive and knowledgeable customer support is crucial when dealing with payment processing issues or questions. Choose a payment processor with reliable support, multiple channels (e.g., phone, email, or chat), and dedicated resources for nonprofit organizations.

10. Donation Receipts

Your payment processor should automatically generate and send donation receipts to your donors, ensuring compliance with tax regulations and providing a professional experience. Look for customizable receipt templates that allow you to include your nonprofit’s branding and messaging.

By considering these key features when selecting an online payment processor, your nonprofit can provide a secure, user-friendly, and efficient donation experience. This will help build trust with your donors, streamline your fundraising efforts, and ultimately support your organization’s mission.

 

Why GETTRX is the Top Credit Card Processor for Nonprofits

Choosing the right credit card processor for your nonprofit is crucial for streamlining donations and providing a secure, user-friendly experience for your supporters.

GETTRX has established itself as a top credit card processor for nonprofits, offering an array of features and benefits that cater specifically to the needs of charitable organizations. Here’s why you should consider GETTRX for your nonprofit:

1. Tailored Solutions for Nonprofits

GETTRX understands the unique requirements of nonprofit organizations and offers tailored solutions to help you maximize your fundraising efforts while minimizing expenses.

2. Competitive Pricing

GETTRX is designed to offer the fairest and most transparent pricing for nonprofits. With a $29/month flat payment and no extra fees, you can rest assured that your nonprofit is getting the best deal.

3. Seamless Integration

GETTRX integrates seamlessly with your website, CRM, and fundraising tools, streamlining the donation process and making it easy for your donors to contribute.

4. Secure and Compliant Payment Processing

With advanced security features, including encryption, tokenization, and PCI DSS compliance, GETTRX prioritizes protecting your donors’ sensitive information, building trust and confidence in your organization.

5. User-friendly Interface

GETTRX provides a mobile-responsive interface and is easy to navigate, ensuring a smooth and enjoyable donation experience for your supporters.

6. Recurring Donations

GETTRX’s recurring donation feature enables your donors to set up scheduled or automatic payments, providing a consistent and predictable revenue stream for your nonprofit.

7. Comprehensive Reporting and Analytics

GETTRX offers robust reporting and analytics capabilities, allowing you to track donations, monitor trends, and make informed decisions based on your organization’s financial performance.

8. Responsive Customer Support

GETTRX’s dedicated customer support team can assist you with any questions or issues, ensuring a seamless experience for you and your donors.

9. Customizable Donation Receipts

GETTRX’s donation receipt feature allows you to create professional, branded receipts automatically sent to your donors, ensuring tax compliance and a polished donor experience.

Don’t miss the opportunity to enhance your fundraising efforts and provide donors with a secure, user-friendly experience.

Learn more about GETTRX and get started today!

 

 

Payment Processor FAQ

Do nonprofits pay credit card processing fees?

Yes, nonprofits typically pay credit card processing fees for each transaction, just like any other organization or business. However, some payment processors offer discounted rates specifically for nonprofits to help reduce their expenses. When evaluating payment processors, compare their pricing structures and inquire about nonprofit discounts or special offers.

What type of security should I look for in a payment processor?

Security should be a top priority when selecting a payment processor for your nonprofit. Look for the following security features:

• Encryption: This technology protects sensitive data, such as credit card numbers and personal information, by converting it into an unreadable format during transmission.
• Tokenization: Tokenization replaces sensitive data with a unique identifier or “token” that has no value if intercepted by malicious actors.
• PCI DSS Compliance: The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements to ensure that all organizations that process, store, or transmit credit card information maintain a secure environment. Choose a payment processor that is PCI DSS compliant.
• Fraud Detection and Prevention: Advanced fraud detection tools, such as address verification, CVV verification, and risk scoring, can help protect your nonprofit and donors from unauthorized transactions and potential fraud.

What is payment fraud?

Payment fraud is any illegal activity or deception involving financial transactions, particularly unauthorized or fraudulent charges. This can include identity theft, stolen credit card information, phishing scams, and chargeback fraud. Payment fraud can have significant financial and reputational consequences for nonprofits, making selecting a payment processor with robust security measures and fraud prevention tools crucial.

How do I find a payment processor that integrates with my fundraising and CRM tools?

To find a payment processor that integrates with your existing fundraising tools and CRM system, research potential processors and review their websites, product documentation, and customer reviews. Contact your fundraising tool and CRM providers for recommendations or a list of their preferred payment processing partners. Many payment processors provide a list of supported integrations on their websites or offer APIs that allow developers to create custom integrations.

Are there any payment processors that specialize in working with nonprofits?

Yes, there are payment processors that cater specifically to the needs of nonprofit organizations. These processors may offer features like discounted processing fees, donation forms optimized for nonprofits, and seamless integration with fundraising and CRM tools. When evaluating payment processors, inquire about their experience with nonprofits and any features or benefits tailored to the nonprofit sector.

How can I ensure my donors’ payment information remains secure?

To protect your donors’ payment information, choose a payment processor that prioritizes security and offers features like encryption, tokenization, and PCI DSS compliance. Additionally, follow best practices for handling sensitive data, such as:

• Limiting access to donor information to authorized personnel only
• Regularly updating and patching software and systems
• Implementing strong passwords and multi-factor authentication
• Training staff and volunteers on data security and privacy practices

Can payment processors handle international donations?

Many payment processors can handle international donations, allowing your nonprofit to accept contributions from supporters worldwide. Consider features like multi-currency support, local payment methods, and reasonable cross-border transaction fees when evaluating processors. Remember that international donations may be subject to currency conversion fees and additional regulations.

How can I compare the costs of different payment processors?

To compare the costs of different payment processors, carefully review their pricing structures, including transaction fees, monthly fees, setup fees, and any additional charges. Be sure to consider any discounts or special pricing available to nonprofit organizations. Calculate the estimated costs based on your nonprofit’s average donation volume and transaction size to determine the most cost-effective option for your organization.

 

Conclusion

There you have it! An extensive list of the key features to look for in an online payment processor for your nonprofit.

By selecting a processor that offers a variety of payment methods, seamless integrations, and comprehensive reporting tools, you can ensure an efficient and secure donation experience.

This will help build donor trust and support your organization’s mission. Good luck!

 

For more information on Payments for Non Profits, check out these resources: Payment Processing for Non Profits