Non-profit organizations often conduct their fundraising online while working towards their financial goals. In order to do this it is imperative that your organization accepts credit cards to make it even easier for people to donate to your cause. This can be a great way to go, but do you really know what fees you’re paying on those donations that people make with their credit cards? The goals of a non-profit are usually to serve the public in some fashion, and certainly the public is better served if more money goes towards the cause and less to expensive merchant account fees. As a non-profit, you may be eligible for lower cost services of which your current merchant services provider may not even be aware of.
A brief overview of the cost of credit card processing costs will help to understand where these savings can occur:
One of the primary costs in merchant services is called interchange. These are categories that are used to classify transactions. Each of these categories has a rate associated with it. For example, swiping a credit card has a particular interchange category, and with it, a specific rate for that category. Swiping a debit card is a different category and may have a different rate. These costs are paid to the bank that issued your customer’s credit card.
Assessments are another cost associated with credit card processing. These are the fees charged by the major associations such as Mastercard, Visa and Discover. These assessments are separate from your interchange costs.
Markups are an additional charge and are paid to a processor such as Bankcard Brokers for their services. Processors can set their own markups, so a business can negotiate these costs to get the best possible pricing model.
A non-profit organization still has to pay these costs, but a processor such as Bankcard Brokers who has decades of experience with non-profit organizations can help you get lower cost merchant services. There are specific interchange categories that are applicable to non-profits only and the associated rates are lower than those associated to for profit businesses.
Every business or non-profit is assigned a four digit Merchant Category Code (MCC) once they begin accepting credit cards. This code can have an effect on the rates you pay for interchange. Non-profits are eligable to receive a specific MCC, and a good processor like Bankcard Brokers knows how to insure your non-profit receives the correct, lower interchange costs on transactions. In addition, Bankcard Brokers utilizes pass through pricing, also known as cost plus pricing, or interchange plus. What this means is you’ll be charged only the actual interchange fees and assessments on processed transactions. This model is much more transparent and saves you money on markup costs and other hidden fees that might be found in tiered pricing models. One might refer to this type of pricing as “wholesale,” because it guarantees the lowest possible fees you can be charged.
In today’s modern world where so many transactions take place online, a non-profit has the ability to raise a great deal of money by accepting credit cards. Think about “The Ice Bucket Challenge,” or that post on Facebook where a dog was injured and a non-profit rescue group raised money to help pay for surgery costs. And for those in person transactions such as fundraisers and events, the same great non-profit transaction processing rates will apply.