Credit Card Processing Options for Non Profit Organizations

If you want to select a credit card processing method for a non profit organization, then you have many options. Though a non profit organization generally gets a few donations each year, but these organizations do have the need to process credit cards.
Their options can be divided into three classes:

Merchant accounts
A non profit organization can register for a merchant account with a credit card company or a bank. In these cases, there is always a question of transaction and start up fees. These fees will differ from bank to bank, so take care to read the fine print. There are many advantages of having a merchant account, but there are disadvantages as well. Let’s take a look:

Advantages
• The name of the nonprofit organization will appear on the credit card statements of the donor.
• Funds will come directly to the bank account of the nonprofit organization.
• It will provide great branding opportunities.

Disadvantages
• The fee structure of merchant accounts is complicated and it will take some time for you to understand it.
• Costs vary widely across different processors.
• There are too many legal formalities that you need to follow, and hence it takes a long time to set up.

Third party processing
If you do not want a merchant account for your organization, then you can get third party processing. A third party processor would have its own merchant account, and it would accept offerings for other organizations. They would pass the funds to your organization’s account and will charge a fee.

Advantages
• It is much easier and faster to set up- as compared to a merchant account.
• Since it does not have many legal hoops to cross, it is relatively inexpensive.
• There are some widely accepted third party processors, and customers have confidence in them.

Disadvantages
• The name of your non profit organization wouldn’t appear on the customer’s credit card statement.
• There is extra time for the funds to get transferred to your account.
• There might be a need to re-enter the information of the donor into the financial records of the organization.



Credit Card Processing Programs for Non Profit Organizations
These programs are specifically made for Non profit organizations and work similar to merchant accounts. They are especially made for fundraising purposes.
Here are some pros and cons of these programs:

Advantages
• There is an integration of financial systems.
• Special attention is given to customer relationship management.
• The entire process is hidden from the donor.

Disadvantages
• These programs are basically for big organizations.
• Their charges are higher than other options.
• There are not many companies that provide these services.

So basically, you have to weigh your options and make a trade-off. Your choice certainly depends upon your goals, and the number of transactions that you want to have. Credit card processing for a non profit organization would definitely require some thought. Take your time before you arrive at a decision.


For more information about credit card processing, visit: www.CreditCardProcessing.org/