What is a nonprofit payment processor?
A nonprofit payment processor is the backend tool that takes funds from your donors’ bank accounts and deposits them in your nonprofit’s bank account. In other words, when a supporter uses your website to submit a donation, pay membership fees, register for an event, or buy merchandise from your online store, a payment processor helps your organization actually collect that money.
For example, say a donor uses their debit or credit card to make a payment on your website. They enter their payment information, and then their card information is sent through the payment gateway to be validated by the card association. As long as the card’s information is legitimate, the transaction will be processed by your payment provider. The process is even easier for ACH (automated clearing house) payments, as there’s no card association involved.
An application program interface (API) integration between your content management system (CMS) and payment processor allows your organization to accept online payments directly through your nonprofit’s website. API integration will help you avoid sending your supporters to a third-party platform to make their donation or purchase, eliminating worries about the safety of their personal or financial information and keeping your supporters on your website longer.
Note that some organizations will have less control over their payment processing than others. For example, nonprofits using a less comprehensive CMS will likely have to purchase a separate fundraising platform and aren’t likely to be able to choose their payment processor. But, for nonprofits using a CMS that allows you to create your own payment forms, choosing and integrating a payment processor will be an important part of creating a robust online giving tool.
What features should I look for in a nonprofit payment processor?
It goes without saying that some nonprofit payment processors will be better equipped to meet your organization’s needs than others. Though you’ll need to take your nonprofit’s unique characteristics into account when shopping for a solution, here are four universal “must-have” features to look for:
- CMS Integration: Ensure that the payment processor you invest in seamlessly integrates with your organization’s CMS. This will make the online donation process easy and intuitive for your supporters, as they’ll be able to complete their gifts directly on your website.
- PCI Compliance: When a payment processor is Payment Card Industry (PCI) compliant, you can be sure that your supporters’ personal and financial data is safe when they give to your nonprofit.
- Tokenization and encryption. Both of these processors keep donor data safe from attackers. Tokenization and encryption turn important data into symbols and codes that can only be read by payment processors so that transactions stay secure.
- Fraud protection. Your chosen nonprofit payment processor should offer fraud protection measures, like Bank Identification Number (BIN) blocking and card verification codes, to keep your supporters safe.
Note that most of these essential features focus on one thing — security. Keeping your donors’ data secure will ensure that your organization’s reputation remains intact, enabling you to retain supporters and keep moving your mission forward. In addition to these features, make sure to look for a processor that is affordable and that provides top-notch customer support.
Nonprofit Payment Processors: 5 Top Providers
Now that you know what a nonprofit payment processor is and what to look for as you shop, it’s time to do some thorough research on different providers. Here are our top 5 recommendations!
Stripe is Infosfm’s preferred payment processor. Stripe accepts all major credit cards and over 135 different currencies. Through API integration with your nonprofit CMS, donors can simply enter their credit card information on your website’s donation form and their payment information will automatically be passed along to Stripe for processing.
- Stripe has best-in-class API integration to connect to your nonprofit website and offers your donors the utmost flexibility in payment options.
- Stripe accepts more payment types than other providers.
- Stripe’s transaction fees are in the higher range for nonprofit payment processors.
- While American organizations processing more than $100,000 per month may be eligible for a volume discount, Stripe is not ideal for high-volume organizations.
American Express, Visa, Mastercard, Discover, JCB, Diners Club International, UnionPay, and ACH transactions
Supports over 135 different currencies
2.9% + $0.30 for Visa, MasterCard, Discover, and American Express
While Donorbox isn’t a payment processor itself, it is a powerful recurring donation platform for nonprofit organizations. It offers a variety of features such as donation pages, donate buttons, donor management, automatic donation receipts, goal meters, crowdfunding, and more.
- Donorbox is well known for its powerful and seamless recurring donation system. Nonprofits can accept weekly, monthly, quarterly, and annual donations easily. With donation pages, embeddable donation forms, and donation buttons, nonprofits can also easily customize and brand their donation tools.
- Its crowdfunding and text-to-give features enable nonprofits to accept donations directly from donors’ mobile phones. Its sophisticated donor management system, fast checkout, and ability to integrate with third-party applications make it one of the favorites amongst nonprofits for online donations.
- Donorbox users can only use Stripe or Paypal as their payment processors. Note that both Stripe and PayPal have a discount for registered nonprofits.
- Support occurs via email communication.
Debit Cards, Credit Cards, Google Pay, Apple Pay, PayPal, and low-fee ACH and Single Euro Payments Area (SEPA) bank transfers
Supports over 20 popular currencies
1.5% Donorbox fee + 2.9% + 30¢ (For Stripe) or 2.2% + 30¢ (For PayPal) or 0.8% + (capped at $5) (For ACH Bank Payments)
3. iATS Payments
iATS Payments is a payment processor specifically for nonprofits. For over 20 years, iATS Payments has allowed nonprofits to collect online donations securely and efficiently.
- A major strength of this payment processor is that it can integrate with a variety of other fundraising platforms including top customer relationship management (CRM) software and text-to-give providers. This is beneficial if your nonprofit uses other fundraising software because all of your data will be synced in one place.
- iATS Payments doesn’t accept some of the more obscure credit cards. If you have many international donors, you may need a payment processor that can handle more credit card types.
Visa, Mastercard, American Express, Discover, and ACH transactions
CAD, USD, GBP, EUR, CHF; gateway services to an additional 180 currencies
Depends on the card type
PayPal is an excellent nonprofit payment processor because it is so well-known. If your donors are located in North America, chances are they already have a PayPal account. This makes the donation process straightforward because your donors can simply enter their password instead of typing in their credit card details.
- PayPal’s strong brand recognition helps build trust with donors because they can feel assured that their payments are secure and they can make gifts in a way that is familiar to them.
- It’s easy for nonprofits to set up a PayPal account and there are no cancellation or withdrawal fees.
- 501(c)3 organizations can qualify for reduced PayPal charity rates. Organizations with higher sales volumes (beyond $250,000 per month) can get more favorable fees.
- Nonprofit websites using PayPal for their donation page will redirect donors to PayPal’s checkout to complete their transactions. This adds a step to the giving process and makes it less efficient for supporters.
- Donors who don’t have a PayPal account will have to register, which can lead to a lengthy donation process. Nonprofits looking to eliminate the account setup process can integrate their website platform with PayPal Pro to accept donations directly through their website.
Visa, Mastercard, American Express, Discover, JCB, Diners Club International, and EnRoute
Supports 25 currencies
PayPal Charity Transaction Fees
1.99% + fixed fee based on currency received
PayPal Pro Transaction Fees
2.9% + $0.30 per transaction
WePay offers quick and easy integrated payments. The payment processing is handled by Chase, a top financial institution in the United States.
- WePay is specifically designed to integrate with leading software platforms like your nonprofit CMS for a seamless online donation process.
- Your WePay account gives your organization transaction-level reporting to see in-depth data about how money is moving through the platform. Every transaction is backed by WePay’s risk management technology for stopping fraud and identity theft.
Currently, WePay only supports users in the U.S., Canada, and the UK. If your nonprofit is international and receives donations in many different currencies, you may need a payment processor that is equipped to handle these types of donations.
Visa, Mastercard, American Express, Discover, and ACH transactions
USD, CAD, GBP
2.9% + $0.30 per transaction, 1% + $0.30 for ACH transactions