How do you process credit card transactions?

TechSoup has a new article being added to the Learning Center today on A Few Good Methods for Processing Credit Cards. What are the best methods your organization uses for both online and offline processing? Any tips for getting the best deal?

We tried Eventbrite (custom online invitation and ticket sales) for our last event and they charged us over $100 in processing fees! I will not use their service again.

However, I do highly recommend Google Checkout. It's easy to set up and has low processing fees. They also allow you to customize the widget so it integrates nicely on your page-- see our "donate now" button. We have different buttons for all of our events, and they money feeds into the same account.

Dear Halle,

How much money did you raise at the event where you used EventBrite? $100 would be reasonable if you sold $5,000 worth of tickets, but steep if you sold $500 worth.

As far as Google Checkout, the last time I made a donation that used that service I was underwhelmed. The price was certainly right, but the features were lacking. My comments were posted on Idealware's blog. The problems I noted were:

• The donor has to register for a Google account.
• The donor has to add a credit card number to the Google account, rather than entering the card for a single transaction.
• The service uses a shopping metaphor. After you enter the donation and credit card info it says it's calculating shipping and tax.
• The receipt is a hybrid between a sale and donation. It lists a quantity of items (e.g., 1 donation) but has the right text for a tax receipt.
• The receipt only displays a limited amount of text. Mine was truncated and ended with points of ellipsis (...).
• I didn't see a way to enter a comment, direct my gift, make a tribute gift, or set up a recurring donation.

Does your donation page have these issues?

Robert

Hi Robert,

We made under $2000 for the event. The site uses google checkout and paypal to process payments, so you're double charged for payments (once by Eventbrite and again by Paypal/Google).

I agree that Google Checkout is not perfect; however, I'm sold by their pricing model-- truly free for non-profits. I think you have some great suggestions for improving the donor experience, why don't you share them with Google? I'd back you up :)

While I think that Paypal and Google Checkout are great, and perfect for small start up organizations or organizations looking to move into online donations, they are not the best for all situations.

I'm the Office Manager/IT Manager for a non-profit in Sacramento. When I was given authority over our website it was using Paypal. Paypal was working great and is very easy to set up and get started with, however there are some limitations:
1. Their basic processing cannot be fully integrated into your website (If you pay more you can). Ultimately the user goes to googles/paypals webpage to process the transaction, so unless the user is familiar and comfortable with Google/Paypal they are not going to give away their credit card information.
2. Paypal (Although not Google) is not the cheapest if you are receiving a fair amount of donations.

Ultimately, I wanted to be able to integrate the donation form into our website (like this) and get lower processing fees than Paypal. After much searching around the cheapest rates I could find were with Costco - 1.9% + $.29 per transaction (It's not actually Costco who does the processing but Elavon, but you deal with Costco designated Elavon employees). This options is not for everyone. I was able to code our own donation form and figure out how to hook into the Elavon process, most people won't be able to do this.

One additional tip. While searching for a merchant account I ran across a few websites that provided an option for the donor to pay for the credit card processing fees, so I tried it on our donation page. I've been up and running for 5 months now and about 50% of the people check the box to cover processing fees. The hardest part is trying to explain how processing fees work. Check out my donation form (link above), the fourth box down and check out the description page that explains the cost of fees.

And that is my two cents.

Justin Wandro
IT Manager
Sacramento Loaves & Fishes
www.sacloaves.org

Hi Justin,

Thank you for the info. Your form looks great. I like how you built in the honorary donation option. And your explanation of processing fees is clear. It's great that your donors are willing to cover the fees.

Robert

I'm in the process of shopping around for a merchant account right now. I found the fees really vary from merchant account to merchant account. I ended up making a spreadsheet listing the discount rate, payment authorization fee, gateway setup fee, gateway access fee and statement fees for each one in addition to any other fees. I found the one offered at TechSoup Stock to be on the high side (surprisingly) compared to the others I've checked out. The ones with the most competitive rate I've found so far are MerchantFocus (they have a discount program for nonprofits) and Merchant Warehouse.

One thing I've found I've needed to be careful about when checking on the discount rate is to make sure I get the right quote for the rate for internet transactions. Some of the merchant account Web sites will show a low "qualified" rate, but that rate applies to in-person transactions (not ones on the Internet). In those instances, the "non-qualified rate" may be quite a bit higher.

I've also had to look for hidden or recurring fees.

I'm finding that some merchant accounts require a set up fee but many waive it, which can be a savings of $150 or more.

Hope that helps. If anyone has a good experience with a merchant account, it would be helpful to post here.

Hi, Affinity,

You are right, the fees on merchant accounts can really vary.

It can be confusing to figure out which is right for you.

One aspect to consider is that some fee systems may work well for one nonprofit but not as well for another. This depends on the giving patterns of the nonprofit's donors, which can vary.

Some merchant accounts charge a flat fee per month, some charge a percentage of the total, some charge per transaction. Analyze your donor base online giving patterns (if you know them) to see which option works the best for you.

For example, if you receive many small donations, then a percentage of total might be your best bet. If you receive a few large donations, then a flat monthly fee might be the best deal.

Best wishes,

Anyone willing to comment on NPC credit card processing ?

Our small nonprofit is looking for a new cost-effective solution to credit card processing.Currently we are using Groundspring, but the cost is high and we aren't able to process event tickets at the event itself.

We need to be able to have a donation button on the website, process event tickets and memberships from inside the office and also from remote locations. I want to be able to complete those remote transactions at the time of purchase, so a mini-swipe reader with a USB interface won't be a possibility, but a phone-line connected card reader/printer will work.

I have looked at lots of providers and NPC seems reasonable costwise. Anyone have wisdom to share?

Hi,

You can find some more information on NPC in this recent Tech Soup thread on Credit Card Processing Rates

and a bit more here that addresses a maintenance question Credit Card Machine.

Best wishes,

My organization doesn't process a great deal of online transactions (< 100 per month) but have found that PayPal works perfectly for us. As a non-profit org this is what we have with a "Website Payments Standard" account: 

• no set up charges
• no monthly charges
• 2.2% + $0.30 per transaction (1.9% for > $100k in donations/month
• donors can pay via credit card OR paypal
• after donation the donor is automatically redirected to a page on our website
• the donors receive an email confirmation that can be used as their tax receipt

.. and here's the link to the non-profit features on PayPal: https://www.paypal-promo.com/donations/faq.html They lowered the transactions charges earlier this year and I notice that the URL above has the word "promo" in it so I'm not 100% sure that these fees will remain forever. I hope so though!

Eventually I'm going to be working on driving more donations through our website; it's much more efficient. Check out our implementation of the online donation service if you'd like by visiting our website at: http://www.JenniferAnn.org and scroll to the bottom (after reading about our mission and goals first) and you'll see our donate button on the bottom left. One thing I like about PayPal is that we were able to customize a donation button - I think it turned out pretty nicely. When you click on the donation button it brings you to the PayPal page for donating. I believe that for a monthly fee we could instead have it remain on our website but I'd rather save money and am fine with the way that PayPal handles it. If you want to make a donation to our organization then you can see the *entire* process (and of course we'll gratefully accept any donation!). :-)

Drew Crecente

Founder and Executive Director

Jennifer Ann's Group

As a software services provider, we work with two great Merchant Account providers that focus exclusively on non-profits. They are Processing for a Cause and Dharma Merchant Services.

Both of these providers use Authorize.net as an end processor, which is an industry standard, and also allows for e-check transactions. They provide a fully integrated merchant solution that allows constituents to easily make donations or transactions without leaving your website, which we have found most people much prefer to PayPal. Also, both donate a percentage of their gross profits back to your organization or to another non-profit organization of your choice.

We have also had several clients rave about the quality of service for both of these merchant providers, as they really focus on clients' needs.

Check them out here: http://www.processingforacause.com
http://www.dharmamerchantservices.com

Lisa Bennett
DoJiggy

Hi everyone,

This is a great discussion! As a number of you have pointed out either here or by email, a service like Google or PayPal may be more appropriate for many nonprofits than a full-blown merchant account. I thought it would be good to draw more attention to that distinction by featuring this discussion on the blog. I even linked to some of your donations pages.

And Justin, I love the idea of giving the donor the choice to pay the processing fee. Explaining how the fee works is a great way to ask for help without insulting the donor's intelligence. It reminds me of Librarything's sliding scale membership fees.

It's almost Friday!
Elliot

Are you all finding that these merchant accounts require a personal guarantor?

Most merchant providers will not require a 501c3 to sign a personal guarantee as long as you can provide adequate documentation (usually the simple statement/letter from the IRS showing that you are a 501c3 - this is something that all 501c3's get). 

 As for the account always be sure that the features match the need.  In cases of Google Checkout and Paypal they may seem attractive at first, when you simply want to add a buy now button to your site and nothing else. But when looking for something like a Virtual Terminal so that you may manually enter the card info yourself (this is useful in cases where someone wants to make a donation via a faxed form or give you the card over the phone), or recurring billing, often times a reasonably priced real merchant account works  best.

If you have any questions regarding these types of issues feel free to email msinfo@merchantseek.com.

Joe