The world of online payments is a fairly new world, but an important one. More and more business is being transacted online every day. Whether you are accepting payments for a business or just trying to accept online donations for your church, you will have to deal with the complexity that is processing money online.
But this is not a hopeless endeavor. With a little information about the process, you can enter into intelligent conversations with different companies to set up online giving or processing without getting taken advantage of.
When you want to sign up for online giving, you need a company that is going to be able to set you up with credit card and ACH processors and provide competitive rates. You are also going to want a company that takes care most of the day-to-day stuff for you, to allow you more time to focus on your ministry, rather than untangling the complicated world of online giving.
Every credit card company charges fees for every transaction run. There is also a cost for every ACH transaction online. Every processor is going to have to build a fee structure that incorporates these fees from Master Card, Visa, Discover, etc. and generate some income on top of that to keep doing business. The Independent Sales Organization (ISO) that sets up your online giving for the Saas that you are signed up with (e.g., CityPay for The City) also has to account for the fees your account will generate just for being on file. Then there is the annual assessment, PCI Compliance, that every organization processing online giving needs to take, which also has a fee. Nothing is free and everything has to be incorporated somehow.
So, some companies will charge a set-up fee, others and annual fee, others a monthly fee, and others may not charge any set fees as they are hoping to make up those fees on the per-transaction fees generated when your church does online giving.
How are fees broken up? Well, all the credit card companies charge a percentage on every transaction that occurs. So, your ISO will have to charge those fees, plus an additional fee for their service. Some ISO’s will just charge a flat percentage per transaction, others will charge a flat percentage plus a cost per transaction.
So, how do the different options stack up? Whose charging what and does it make sense? Is it a good deal or not? Here is a basic breakdown of some of the key players, what their packages look like:
3.5% + .50/trans
3.0% + .64/trans
3 yr. Contract
3 yr. Contract
So, there are definitely a lot of numbers in that table. What do they all translate to? Here’s what we did, we looked at the national average for online giving per attendee per year at the average church. You can basically expect $1,000 per attendee per year via online giving at a church. So, when we break it down by church size and use the different fees from above, here is what each service will cost in a year:
$20K w/ 20 Givers
$60K w/ 60 Givers
$150K w/ 150 Givers
$250K w/250 Givers
$600K w/600 Givers
$800K w/800 Givers
$1M w/ 1,000 Givers
So, all-in-all, there are a lot of factors to take into account when making a decision on who you are going to use as your ISO/SaaS. Don’t let pretty rates and nice jargon on a well-designed page fool you, look at the numbers, do the math, and make a decision. See what each company will do for you in the long run.
And that is the kicker, in the end, the value-over-rate discussion. A company might have good rates, larger companies can afford to. However, their value is next-to-nothing. Companies like GivingFire are set up specifically for churches, who understand what churches need, how they operate, how they need to track donors and provide year-end-giving, and the need for simplicity above all. You also need to consider who provides more direct access to live help, not an automated response or generic Q&A sheet posted online. When you call, you talk to a person on the other end of the line who is going to do everything they can to provide excellent customer service and resolve any issues you may have in a timely manner. It is the added value, at the end of the day, which will determine which company you decide on using.