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Benefits of Accepting ATM, Debit and Credit Card Donations

Why would a church want to accept  donations by ATM, debit cards or credit cards?

Welcome to the digital age. The giving patterns and methods of church members are quite different today than it was in years past. The economic world is also different. Our society is more affluent, mobile, and sophisticated. The implications for churches are numerous.

Many members are accustomed to making purchases or payments by using their ATM, debit and credit cards. They are accustomed to the benefits of using their cards and have come to appreciate the usefulness and advantages.

Many people are more likely to carry an ATM, debit or credit card than a checkbook or large amounts of cash. When special needs arise, a credit card is often more conducive for the emergency or non-anticipated expenses than is cash or a check. Many are also more comfortable making non-anticipated purchases (or donations) on a credit card than by check. It simply gives them the time to arrange to transfer funds or deposit money into their checking account to pay off their balance.

Even with planned giving, there are times and circumstances that donors prefer to make their donation by using their credit card. It can allow them up to two months to transfer the funds. Particularly at the end of the year when tax deductions are most desirable. Donations can be made and receipted in one year while postponing the actual payment until the next. This can be of great benefit to many self employed professionals and business owners whose cash flow decreases during the end of the year holidays. It is these same individuals who are often able to make larger donations to their churches.

In churches that have started utilizing credit card donations, some experience increased donations beyond what they had been receiving. This is true not only for tax deductions, but also due to the benefits that many card holders have come to enjoy, such as frequent flyer miles and rebate programs. Others appreciate the personal accounting ease of credit cards.

There are cash flow issues that many churches struggle with. Sometimes the bumps in the cash path can be smoothed out by members who are willing to make reoccurring credit card donations, even if business takes them out of town and away from their home church for periods of time. Others are willing to make non-routine credit card donations at the time of church need and can then work out their own personal finances after the fact.

Many church members appreciate having the option of making their charitable and church donations by either an ATM, debit or credit card. As a participating church, you are simply offering your members more choices and providing additional menu items for their method of payment. Debit and credit card donations are not for every member of the church, but when used wisely the benefits are significant not only for the members, but also to the church.

The Expensive Merchant Account

Unfortunately, the benefits of being able to accept ATM, debit and credit card payments have been out of practical reach for most churches. A high volume of usage is needed in order for the benefits to exceed the costs involved in establishing and maintaining the required merchant account.

Up until now it was economically poor stewardship for most churches to accept credit card donations on an occasional basis. Even if a high volume of members utilized credit cards, it still was not economically practical. The cost and specifics vary from bank to bank, but the following table lists the typical multiple charges that can add up to substantial monthly and annual fees. The contracts for a merchant account are complex and many have  hidden charges that are not discovered until after the contract is signed. To learn more about hidden charges, click here.

The Affordable Alternative

Since all of our members will be organized churches with the ability to provide receipts for tax deductions, we have been able to work out an agreement with the relevant financial organizations involved in the credit card processing, enabling us to provide economical credit card processing for our member churches. The stringent moral, ethical, and legal requirements that all of our churches must follow, adds an additional level of security and trust not present in a general, less defined population of users.

We have been able to keep the costs down by automating the process as much as possible. By utilizing Electronic Funds Transfer, and by giving churches access to their account status at any time by computer connection, we have been able to eliminate the high costs of mailing statements.

The only fees your church would incur are an annual fee of $98, a discount rate of 3.25%, for VISA, MasterCard and Discover, and 4.5% for American Express, and a transaction fee of .75¢. As long as you don’t incur chargebacks, where a donor disputes the donation and the money must be refunded, you don’t incur additional fees. Chargebacks carry expenses of $30.00 per chargeback, but with care can be minimized or avoided.

For only $98.00 a year you can have the option and the ability to accept ATM, debit and credit card donations, and reap the benefits of increased donations and better cash flow.