What Canadian Nonprofits Should Know Before Switching Payment Processors
December 31, 2024
This article was contributed by our featured guest, Raisa Rashid, Project Management Director at Pllenty.
Switching payment processors is a big decision for nonprofits. The right one isn’t just a tool, it’s a partner that helps you manage donations, membership fees, event payments, and more. But before you make the move, you need to make sure the new processor is the right fit for your needs. Here are a few key things to think about:
1. Understand the Costs
Payment processors typically charge fees in two ways: per transaction and monthly. Both can add up quickly, so it’s important to do the math upfront.
Per-Transaction Fees:
These are fees for every donation or payment made. Some processors charge a percentage of the transaction, a flat fee, or both. For nonprofits handling many small transactions, these costs can add up. Pay attention to processors that might not let you benefit from lower-fee methods, like Visa or Mastercard Debit.Monthly Fees:
Some processors charge monthly fees for account maintenance, access to reporting, or other services. These fees vary widely, so it’s worth comparing the monthly cost structure to find the best fit for your budget.
Think about the overall fee structure and ask yourself if it works for your nonprofit’s transaction volume and financial goals.
2. Supported Payment Methods
Your donors use all sorts of payment methods, and your processor should too. Make it easy for them to give,
Credit Cards:
Does the processor support all major card types, like American Express or Discover? If a significant portion of your donor base uses these cards, this could be a dealbreaker.E-Wallets:
Digital wallets like Apple Pay, Google Pay, and PayPal are gaining popularity. If these are a favorite among your donors, your processor needs to accommodate them.Pre-Authorized Debit (PAD):
Many nonprofits rely on PAD for recurring donations.
Survey your donor base or review past transaction data to make sure your next processor supports the methods your supporters prefer.
3. Consider Cash Flow and Fund Hold Times
For nonprofits, steady cash flow is so important for your mission. Knowing how quickly a processor will release your funds can make or break your decision.
Fund Hold Periods:
Some processors transfer funds immediately or within 1 to 2 business days, while others hold onto them longer. Delays can create cash flow challenges, especially during busy donation periods.Chargebacks:
In cases where a donor disputes a transaction, some processors hold funds longer while investigating.
Choose a processor with a fund release schedule that aligns with your operational needs, and provides enough time to manage unexpected issues like chargebacks or refunds.
4. Check the Tech Support
What happens if donations stop coming through or a glitch interrupts your campaign? Having responsive, knowledgeable tech support can save the day.
Availability:
Can you reach someone quickly when you need help? Nonprofits can’t afford downtime during critical moments.Expertise:
Does the support team understand nonprofit-specific needs, like managing recurring donations or generating tax-compliant receipts?
Ask about response times and read reviews before committing. Ask for a demo if available, and don’t be afraid to ask how these sorts of scenarios are handled by the provider. Reliable tech support can prevent a lot of frustration.
5. Make Sure Recurring Donations and Receipts Work Seamlessly
Recurring donations are a cornerstone for many nonprofits, providing reliable revenue. A good processor will make this process easy for you and your donors.
Recurring Donations:
Look for features like easy setup, renewal reminders, and the ability for donors to update their payment details. Advanced options like variable donation amounts or pausing donations can also be helpful.Receipts:
Automated, tax-compliant receipts save time and ensure donors get what they need during tax season. Make sure the processor complies with Canadian tax regulations for charitable donations.
These features enhance donor trust and reduce administrative burdens for your team.
Final Thoughts
Switching payment processors is a great opportunity to make things easier for your nonprofit and improve the experience for your donors. By looking at things like costs, payment options, fund hold times, tech support, and how well recurring donations are handled, you can find a processor that works for you.
If you’re not sure where to start, check out Pllenty, a payments platform built with the needs of nonprofits in mind. Pllenty offers charity pricing, an array of payment methods, and helpful features like easy recurring donation management and automatic tax receipts.
Choosing the right processor means you’ll have more time to focus on what really matters — making an impact and supporting your community.
About Belmar
Belmar Consulting is an award-winning Salesforce implementation partner, who works with various organizations and enables them to succeed in their digital transformation journey. We combine our intimate knowledge of the public sector and the nonprofit industry with Salesforce to create and implement innovative solutions for our clients. Belmar’s dedication to delivering successful client projects means our clients are more effective in their role to fulfill their organizational missions.
