Online Payment Processing for Nonprofits: Everything You Need to Know

Website & Technology November 22, 2019

Tatiana Morand

By Tatiana Morand

This is a guest post by Callie Hinman, Content Strategist for AffiniPay


Whitney walked out of the quarterly planning meeting feeling equal parts inspired and anxious. She had been tasked with finding a way to breathe new life into the financial operations of the animal shelter at which she’d recently been hired.

She was thrilled at the opportunity to make impactful change at the organization so soon after being brought on board. However, she also recognized her shorter tenure meant she’d have to make an exceptionally convincing argument, since she was still in the process of earning the trust and support of her colleagues.

While there were a few ideas she was mulling over, the one she kept coming back to was implementing an online payment processing system. 

She had a general sense of how adopting online payments could help the shelter raise funds and sell merchandise more efficiently, but knew the decision-makers would have plenty of questions she’d need to be able to answer confidently.

Thankfully, Whitney found a resource that laid out everything she needed to know about online payment processing for nonprofits — and there was no doubt in her mind that she’d have every stakeholder on board by the end of the next meeting.

Are you in a similar boat? 

If so, I’ve put together this resource to help you understand how online payment processing can benefit your nonprofit, as well as how to make sure you’re choosing the solution that’s right for you.

In this post, I will cover:

What Nonprofits Can Do with an Online Payment System

Online payment processing for nonprofits can not only make your organization more efficient, it can also benefit donors and members in more than a few ways.

Here’s a rundown of what you can accomplish by partnering with a nonprofit payment processing provider and how to make sure you’re choosing the best solution.

1. Securely Collect Donations

Charitable contributions from individuals account for nearly 70 percent of the average nonprofit’s income. 

And according to the Global Trends in Giving Report, over half of donors worldwide prefer to pay online via credit or debit card. Plus, 92 percent say it’s important for organizations to make a concerted effort to protect donor information.

An online payment system allows your nonprofit to accommodate donor preferences and do so securely. Paper credit card slips can get lost and end up in the wrong hands, but with an online payment solution, sensitive details are encrypted and transmitted directly to the financial institution, keeping them protected from outside interference. It should also allow donors to set up recurring donations, meaning they can support you regularly without you needing to follow up. 

Offering this convenience and security shows donors you have their best interests in mind, which can go a long way towards obtaining repeat donations. 

Read More: Understanding Online Payment Services + Top 10 Payment Providers

2. Process Merchandise and Ticket Sales

While donations are most organizations’ main funding source, merchandise and ticket sales can be a major driver of revenue as well. In fact, Eventbrite reported that tickets sales were a top source of income for 75 percent of nonprofits

Additionally, when supporters use or wear a product branded for your nonprofit, it can increase awareness of your organization and spread your message to a wider audience, helping prompt more sales and donations.

Some software providers who specialize in online payment processing for nonprofits, such as WildApricot Payments, can also help you easily add online payment capabilities to your website. With this functionality, you can process sales of merchandise and event tickets without having to redirect visitors to a third-party site. 

This enables you to create a more streamlined, consistent payment experience that instills confidence in your nonprofit and keeps your association front and center throughout the process. 

Plus, having the option to sell merchandise and tickets to events online increases your available contributor base since you’re not restricted only to in-person transactions.

3. Easily Accept Membership Dues

If your organization is a trade-based association, membership dues likely make up the bulk of your revenue. Consequently, it’s in your association’s best interest to make paying dues as easy as possible.

An online payment system enables you to not only simplify one-time charges but also set up automatic recurring payments. With recurring payments, a member provides their payment details (such as their credit card number or bank account information in the case of eCheck payments), the amount they would like to be charged, and the transaction frequency—for example monthly or quarterly. Then, at the designated intervals, the member is charged, and the payment is deposited into your organization’s account.

Using online payment technology to establish a recurring payment option can also be a great recruitment tool. The ability to pay dues throughout the year instead of all at once can be appealing to new and young members who are reluctant to spend hundreds of dollars before they’ve received any membership benefits.

Read More: How You Can Make Your Membership More Affordable For Young Members

4. Protect the Organization

Storing payment information at your office puts your organization at risk and increases your security responsibilities considerably. But with online payment software, all of the data is stored in secure servers and all transaction information is encrypted to keep it safe from cybercriminals.

In addition, when you use a nonprofit payment processing solution, all payment information is verified instantly. You’ll know immediately if an account has insufficient funds or if a card number is incorrect — no more bounced checks or failed credit card payments! 

The best payment processors for nonprofits also offer powerful dashboards that give you insight into the financial health of the organization so you can make smart, data-driven decisions and better manage seasonal trends.


Read More: 6 Data Security Practices For Nonprofits in The Digital Age


The Difference Between an Online Donation Tool and a Payment Processor


An online donation tool is traditionally a third-party software a nonprofit can use to create donation forms that allow the nonprofit to accept donations on their website. However, in order to use an online donation tool, the nonprofit must work with the software provider to connect the donation form to a payment processor. Otherwise, there’s no way to move funds from the donor’s account to the nonprofit’s as the online donation tool doesn’t have that capability.

In addition, an online donation tool is used almost exclusively for accepting donations, whereas a nonprofit can use a payment processor to accept member dues as well as payments for events and merchandise. Plus, payment processors often have more robust security measures in place to keep all financial information safe throughout the transaction.

Read More: Nonprofit Credit Card Processing: Everything You Need to Know

10 Questions to Ask Nonprofit Payment Processing Providers

If you’re considering partnering with a provider of nonprofit payment processing, you should know they aren’t all created equal. As you review your options, ask the following questions:

1. How user-friendly is the system, and how easily is it implemented?

There’s no sense investing in an online payment processing solution that’s cumbersome, requires extensive training to understand, or takes months to get up and running. Request a demo of the software so you can see for yourself how easy it is for your team as well as your donors and members to use.

2. How does the provider debit processing fees?

Avoid providers who take the fee off the top of every transaction, as this makes reporting and reconciliation more difficult. Find a provider who instead debits all the processing fees incurred the previous 30 days in one lump sum at the end of the month.

3. Does the processor offer a mobile app?

Mobile credit processing allows you to take advantage of revenue-generating opportunities that you may otherwise miss out on, such as securing donations at fundraising events.

4. Which features are included and which ones cost extra?

Some payment solutions providers have different tiers where some features are only available if you pay extra. Depending on the features you’re looking for, this can increase the cost, so make sure you’re looking at a provider that will include all the features you need without top-tier prices. 

5. Are scheduled or recurring payments an option?

Scheduled or recurring payments are a powerful tool that can help improve your fundraising efforts, donor acquisition, and member retention. Ensure the payment processor includes a recurring payment feature in their platform.


To learn more about how recurring payments can help with membership retention, watch this video: 


Read More: The Donor’s Guide to Recurring Donations: How to set up, view or edit a donation subscription

6. Which types of payments can the system process?

While nearly every online payment software can process credit cards, you should look for a provider that can also process eCheck payments. Just like direct debit via ACH, eCheck payments debit monies directly from a checking account, which makes recurring payments easier since account numbers change less frequently than credit card numbers.

7. With which solutions does the processor’s software integrate?

Online payment processing for nonprofits makes managing your nonprofit’s finances easier…  but only if the system integrates with the other platforms you use. When considering solutions to assist with practice management, for instance, look for systems that integrate directly with a payment processor, such as WildApricot Payments, powered by AffiniPay.

8. What kind of customer support is available?

Premium online payment solutions providers will have an in-house support team with whom you can get into contact multiple ways — for example, email, phone, and chat. They’ll also have a self-service portal with extensive articles you can use to find answers to questions on your own.

9. What is the provider’s level of PCI compliance?

PCI (Payment Card Industry) compliance refers to adhering to a set of guidelines created by the major credit card brands which ensure organizations that accept credit cards protect cardholder data from being compromised. Level 1 PCI compliance is the highest and has the most stringent validation requirements.

10. What security measures does the provider have in place?

With cyberattacks on the rise, it’s critical the nonprofit payment processing provider you choose has extensive security measures to keep your organization safe. In addition to PCI compliance, the provider should have advanced fraud protection and robust data privacy protections.

Using an online payment system can offer your nonprofit substantial benefits. To make sure you choose the right solution, ensure the provider treats you like a partner, not just another customer. Your goal should be to find a company that is as invested in the success of your nonprofit as you are.


callie affinipayCallie Hinman is the Content Strategist for AffiniPay, a provider of online payment technology for professional services, associations, and nonprofits. She holds a B.A. in English from the University of Texas and is staunchly committed to following Ann Handley’s Rule of FIWTSBS (“Find Interesting Ways to Say Boring Stuff”).

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