This article will explain how to get a merchant account for a non profit organization, and what to expect in terms of fees and payment charges.
Merchant Accounts for Non Profit Organizations
For many non profit organisations, from the largest of popular charities to the smallest community groups, giving people the option of donating by credit or debit card usually proves worthwhile. One off donations tend to be larger and, perhaps most importantly, the likelihood of receiving recurring donations at regular intervals is significantly increased.
However, in order to begin accepting this type of donation, the same rule applies regardless of whether or not an organisation intends to profit from their business or not.
You must first either enlist the services of a third party processor, set up a relatively expensive credit card processing program or else, and as is most common, seek out a merchant provider and acquire a merchant account.
This can take some time, due to necessary credit checks and form filling. But once a merchant account is in place, the speed and ease by which funds are transferred does provide a distinct advantage when it comes to a non profit organisation receiving its much needed cash.
Potential Concessions Available for Non Profit Organisations
Although it is often the case that merchant account providers will offer concessions for non profit organisations such as free set up and discounted fees, charges between providers do vary considerably, so it pays in the long run to be extremely thorough when doing your research.
Companies should always be able to provide clear and accurate information on pricing, not merely in their small print, but through their sales reps and customer advisers, should queries arise.
Choosing a Merchant Account for your Organisation
Naturally, when choosing a merchant account provider for one's non profit organisation, there are many other factors to take into consideration.
- Firstly, it would be prudent to ensure that the name of one's charity will appear on the donor's credit card statement as opposed to that of any third party. This is important as it avoids customer confusion, which in a worst case scenario could result in cancellation of initial and subsequent donations should a customer dispute the charge.
- Secondly, it is always worth checking which types of card are accepted, bearing in mind per-item charges for some may be higher than others and taking into account the frequency of donations received through each of the main financial institutions. There is little point paying extra for the services of American Express if most of a charity's donors choose to contribute by Visa.
- Thirdly, if one's charity is web based or else accepts donations via a website, does the merchant account provider guarantee 24 hour service? Additionally do they accept MOTO payments on the same terms?
- Finally, but by no means least importantly, it is vital to ensure that security (particularly online security) comes guaranteed.
As previously stated, fees do vary, but do not assume a merchant account provider will automatically charge more should all the above requirements be met. In fact, these should come as standard. Anything less and they'd be doing your organisation a disservice.
Also, when it comes to fees for non profit organisations, it is always worth checking out one's official entitlements regarding necessary expenditure.
Not For Profit Merchant Account ProvidersThere are merchant account providers specialised in providing services specifically to non-profit organisations. These providers usually have lower rates and fees and a history of serving non-profits and NGOs, so they understand your specific needs.
Blackbaud Merchant Services
Blackbaud are a US-based merchant account provider with a long history of providing payment services to non-profits and NGOs. Their service is only available to non-profit organisations which are already Blackbaud customers. But if you are a Blackbaud customer or were considering switching to them, their merchant account service could well be the right solution for you.
CashFlows has been in business since 2003 and have won several awards for their service. They have a special Charity Merchant Account which will help you take one-off and recurring payments from donors. They will enable you to accept all major debit and credit cards and the account includes a free virtual terminal service.
PayPal also offer dedicated merchant accounts for non-profit organisations and charities. They offer discounted merchant account fees and rates to registered charities, so if you are registered then you can benefit from competitive pricing.