Non-Profit Organisation Merchant Account

iPayTotal’s Credit Card Processing Options for Nonprofit Organizations

There are a number of options for nonprofits when selecting a credit card processor. Although there is little doubt that a nonprofit, that expects more than just a few donations a year, should give donors the option of using a credit card, how a nonprofit does that is not always an easy question to answer.  The options generally can be grouped into three categories:

Our Solutions

FUNDRAISING

Donors expect it and will be more likely to donate when you offer this service.

CROWDFUNDING

A recent report by Massolution shows in 2016 the crowdfunding industry accounted for more funding than venture capital.

Advantages
  • Nonprofit’s name appears on donor’s credit card statements
  • Excellent branding opportunities
  • Funds flow quickly into nonprofit’s account
Disadvantages
  • Complicated fee structures
  • Wide variance of cost across processors
  • Longer time to set up and more legal hoops to jump through
Third-Party Processors

If your organization does not want to apply for a merchant account, choosing a third party processor may be a solution. A third-party processor uses its own merchant account to accept donations for other organizations. The third party processor passes on the donations to the nonprofit, minus a processing fee. There may be some delay in getting the funds into your own account.

 

One of the downsides of using a third party processor is that often the name that shows up on the donor’s credit card statement is not that of the intended nonprofit. When this happens, it is possible for the donor to be confused and to even protest the charge, sometimes resulting in a chargeback. The question for your nonprofit is whether the possibility of confusion is outweighed by the ease of setting up and managing the account.

Crowdfunding Rules

Beginning May 16, 2016, Regulation Crowdfunding acts as the law of the land in the US. For the first time, there is a legal framework for US startups to look for equity investment from the general public. Of course, this is a historic event, but it may be soon for startups to celebrate the regulation.

The reason is that capital formation is just one of the SEC’s (Securities and Exchange Commission) 2 main responsibilities. The second responsibility is to maintain order and protect investors. To achieve the second objective, the new crowdfunding rules are represented with restrictions covering 3 the following spheres:

  • Limitations imposed on the amount of money investors can invest
  • Requirements imposed on the form and mechanism for the transactions
  • Offering limitations and disclosure obligations imposed on companies
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