Payment processing when it comes to nonprofit organizations is used for handling the financial information of a donor when they make online transactions.
These transactions may include buying online merchandise, giving a donation, registering for a charitable event, or paying for the fees collected for every member. The companies that process and deal with the debit and credit transactions between nonprofit organizations and the donors are called payment processors.
Why are Payment Processors Needed?
Nonprofit payment processing companies are essential as they are the ones processing donations online. Without them, collecting donations from international (and even local) companies can be hard, if not impossible.
When there is a nonprofit payment processing company, the process of accepting donations from US support groups can be easy wherever you are around the world. Also, they allow several currencies, which makes it easier for countries with different currencies to send and accept donations.
For buying merchandise, some nonprofit organizations have an online store that when you purchase something from their store, the proceeds go to the benefit of the said nonprofit organization. Payment processing companies also make it easy for donors to buy their merchandise without actually going to the organization’s physical store/office.
When collecting membership fees, payment processing companies also help in enabling support group to show their support by joining the nonprofit group’s membership program. Fees are collected monthly or annually; that’s why a payment processor is crucial in this type of transaction.
For buying event tickets, they are also purposeful as they help supporters buy tickets for events that the nonprofit holds. If the ticket buyers purchase their tickets online, a payment processor is needed to make the transaction quick and easy.
How do payment processors and online donation tools differ from each other?
Payment Processors
A payment processor is more like a tool that works behind the scene. They aid in collecting donations done for nonprofit organizations online. Some payment processors even offer donation forms that you use for your organization (with your brand on it).
However, that is not the fundamental purpose of payment processors. Some payment processors do not have an online donation form. The main benefit of this company is to collect the financial data of the donor and help turn it into a gift to a nonprofit organization securely.
If you are looking for something that offers a more advanced option for your donation website and a more seamless merging of your organization’s CRM, you may need an online donation tool and not a payment processor.
Online Donation Tools
Online donation tools are the same as what advertisers promote. Although the styles in collecting donations may be different from a payment processor, it still follows the same principle as them (helps in soliciting donations from your organization’s supporters). The only difference is that they can provide a webpage that your supporters can visit and do the donation transactions there.
Payment processors are crucial in making the donation process quick and easy. Without them, getting donations from huge countries like the United States can be impossible or difficult.