Donations made with cash and checks are on the decline across the board. Credit card swipers giving kiosks are on the rise, especially in the church community.
While it’s obviously important to cater to the wants and needs of your members and make it as easy as possible to donate, credit card donations can bring with them a host of fees.
Those fees aren’t paid by your donors, and credit card companies certainly aren’t giving away their services for free. That means your church pays every time you accept a card swipe.
Donations Take a Hit
There are monthly fees over and above the cost of leasing the card swiper or kiosk. So what are all the rest that are eating into your donations?
Additional Transaction Fee
Every time you accept a credit card you are charged $0.30 or more per transaction.
American Express and Discover Rates
American Express and Discover cards (the premium type of credit cards) are charged at a higher rate by credit processors than other cards.
Along with the yearly contract, merchants almost always pay an annual fee of around $100 per year.
Each credit card charges its own type of processing fees. Business rewards cards charge higher rates than non-rewards cards. When a non-rewards card is used, the credit card company will charge anywhere from 1-3% to make up the difference, and about 50% of transactions get hit with this fee.
Early Termination Fee
Credit card processors usually require contracts, just like your cell phone company. If you cancel before your contract is up, you are charged $100 or more.
International Card Fee
If your church or nonprofit accepts donations via international credit cards (cards issued by banks in other countries), there is an additional fee that varies from card to card.
Monthly Minimum Fee
Whether or not you process any donations, you’re still paying the credit card companies. There is almost always a minimum monthly number of transactions, and if you’re not meeting that minimum you can be charged $25 or more per month.
Non-Swiped Transaction Fee
When you key in rather than swipe a credit card, you are charged an extra 2-3% per transaction.
PCI Compliance Fee
Payment Card Industry (PCI) Compliance is the means by which financial transaction information is kept secure, and is required by law. Credit card companies pass this fee along to merchants, adding $100 per year or more to your fees.
Believe it or not, credit card companies can charge you to receive an account statement–to the tune of $5+ per month. Usually (but not always) this fee can be eliminated by receiving statements electronically rather than in the mail.
What Are Your Options?
More and more people make donations and purchases with cards instead of cash or checks, as we talked about in a previous post. Still others do everything online or via mobile devices.
There are a number of ways to reduce your merchant credit card costs. Make sure you set up the right merchant account that fits your organization. Banks and credit card processors will usually work with you to negotiate a fee structure that makes sense.
Your donors will be more inclined to give when you offer options that suit their needs. It’s important not to rule out any solution that allows people to donate to your church. Each one has its upside and downside, so you should choose what’s best for your church and your members.