8 Tips to Consider While Choosing the Payment Processing for Nonprofits in 2022
This “8 Tips to Consider While Choosing the Payment Processing for Nonprofits in 2022” originally published Feb 25, 2022 by Scott Dickens.
Today, businesses across multiple industries strive to deliver a seamless experience to their customers. Nonprofit organizations are no exception. They also look for a hassle-free process to collect online donations as it saves their time and resources from managing physical and time-consuming donation processes.
So, what are the useful tips that should consider while choosing online payment processing for nonprofits?
Whether you’re already processing donations online or planning to get started for the first time, the following tips will help you choose the best payment processing platform for your nonprofit organization.
Most payment processors consist of a rigorous registration process, which can drain your precious time and resources in setting up the platform.
To avoid such a challenge, consider a processor that works explicitly with nonprofits, has experience with nonprofit clients or even incorporates a nonprofit-specific version of its sign-up procedure.
It can be challenging to evaluate additional charges on top of the base processing rate. Even if the base rate is low, the effective rate can be high. Make sure you ask about additional charges that could be incurred before investing in a credit card processing solution to have a complete view of the expenses.
Lack of Data Portability
If you decide to switch to another payment processor, you need to transfer your donors’ saved credit card details to your new processor. But, some aggregators do not offer such options for data portability.
So, when you are seeking a payment processing system to meet your business needs, consider portability functions and look for a processor that can integrate with your platforms and export sensitive donor data into these systems.
Recurring Payment Option
Many payment processors offer recurring payment features that allow your donors to set up automatic recurring payments.
In simple words, it enables donors to pay dues throughout the year automatically by adding the credit card or bank details in the processor.
To leverage the benefits of the recurring payments option, one needs to feed their payment detail such as credit card number or bank account details, the payment they would like to make, and the transaction frequency — for instance, monthly, quarterly, or yearly.
Once the details are added, the user will be charged at the selected intervals, and the payment will be deposited into your institution’s account.
Policies and Processes
Most payment processing companies often update their policies with little or no regard for their nonprofit and small business clients’ interests.
Suggested to do preliminary research about the credit card processing companies’ policy history and previous client experiences to ensure that you choose the right partner for collaboration that is sensitive to your organization’s needs.
Long Hold Periods
Many processing companies set longer hold periods, minimum 30–45 days to max 90 days, to serve their financial interest. As a result, it becomes unfavorable for nonprofits as they usually need quick access to their funds.
On the other hand, a renowned payment processor does not follow the same principle to determine hold periods.
Therefore, it is recommended to go for a specific organization that defines reasonable hold periods, protecting your nonprofit business from fraud without holding your funds for a longer period.
While collaborating with a payment processing company, it is critical to ensure they comply with PCI regulations and standards. PCI, also known as Payment Card Industry standards that revised yearly by the PCI Security Council. Meeting PCI standards and regulations enables nonprofit organizations to build trust and goodwill among donors to use their online payments channels.
The security council also provides a rigorous framework to develop payment processing security features that expand the capability to detect and mitigate the risks of security breach incidents and vulnerabilities.
So, make sure to ask your partner if their process meets PCI compliance and regulations.
Indifferent Customer Service
One of the common challenges faced by nonprofits with payment processing companies is indifferent customer service.
Payment processors often discourage investing time and resources in customer service for clients if they don’t find it necessary, especially if they are small businesses.
As a result, customer service is outsourced in such cases, and quality assurance is often lacking.
While considering payment processing services providers, make sure to ask them about their customer service policies that should prioritize customers’ interests.
Deciding on Choosing the Right Payment Processing Platform
Investing in the right payment processing platform helps eliminate manual accounts receivable processes, decrease payment fees, and accelerate payment collection.
When deciding on a payment processing provider, make sure that it will integrate with your platform hassle-free and deliver a seamless experience to your donors.