All About Online Payment Systems

Here's how fundraising used to work: Your organization would get a pledge and wait for the donation to arrive in the mail as a check.  Today, there’s an entirely new front in the battle for donations that didn’t even exist 15 or 20 years ago. In addition to those checks you might still get from donors, you have to think about processing payments online.  This topic was covered in-depth by an article in the latest edition of The NonProfit Times:

Like any endeavor, nonprofits have to consider what it is they’re trying to accomplish when they consider online processing vendors. Whether it’s a small nonprofit being able to accept online transactions or a more nuanced organization aiming to improve the conversion rates of its online donation form, these are questions your charity must ask.


Credit card processing online is a commodity, said Jim Barney, vice president of sales and marketing at Blacksburg, Va.-based Click & Pledge. “You can go to 500 different places and someone will open a merchant account for you. It’s easy to find the lowest price, just shop around. The key to getting value is, what do you get with it,” he said. For a nonprofit, it’s not always about getting the cheapest price on credit card processing fees, he said, but about the software and tools to help make it more successful.


Every payment processor in the industry has core competencies and different features for clients, said Nim Patel, CEO of Mobile Accord in Denver. But when examining mobile payment processing, things to consider include services, the reliability of the system and its overall strength. Large nonprofits have to remember that they have some sway, which could help them get a better rate. “The nonprofit market is not completely ignored by these guys (credit card companies). For larger organizations, the thing they need to realize is they do have some purchasing power. They shouldn’t take what’s offered at face value, try to negotiate,” said Hayden Stewart, vice president of information technology at online fundraising firm Convio in Austin, Texas.


Nonprofits can use PayPal as a donation method within their other providers. “We plug in to your existing solution, and work with the partner you use to power your donation form,” said Clam Lorez, director, nonprofit engagement, at PayPal. “There are a lot of small nonprofits that use PayPal donate buttons as an off-the-shelf solution for their really basic needs,” he said. Other nonprofits use a suite of PayPal products, handling all different types of transactions. PayPal has more than 200,000 nonprofit accounts and handled almost $1.8 billion in transactions for nonprofits last year.

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