December 16, 2021

Best Credit Card Processing for Nonprofits

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These credit card processing providers offer special discount rates for nonprofits. Save on fees so you can keep more funds for what truly matters.

The Best Credit Card Processing for Nonprofits
  1. PayPal - Best for local nonprofits
  2. Dharma Merchant Services - Best for processing $10K+ monthly
  3. National Processing - Lowest rates
  4. Payline Data - Best for all types of nonprofits
  5. Square - Best for fast set-up + seasonal nonprofits
  6. Stripe - Best for online-only donations
  7. GoFundMe Charity - Best for crowdfunding

Nonprofits have it tough. Funding and resources are already tight.

You don't need high processing fees taking away from your cause.

Luckily, some credit card processors offer reduced processing rates for nonprofits. They understand all the hard work you do and how important it is to keep costs low.

Whether you're a small local charity or a large organization, one of these processors will fit your needs.

What's the best payment gateway for nonprofits? Smaller charities should look into PayPal because it's easy to set up and there's no monthly fee. If you're a slightly larger organization, check out full-service providers like Dharma, National, or Payline.

Best Credit Card Processing for Nonprofits

Here are the top credit card processors for nonprofits and charities that offer special nonprofit rates.

CompanyIn-personOnline
PayPal2.29% + $0.091.99% + $0.49
DharmaInterchange+ 0.10% + $0.08Interchange+ 0.10% + $0.11
NationalInterchange + 0.12% + $0.06Interchange + 0.12% + $0.06
PaylineInterchange + 0.10% + $0.10Interchange + 0.10% + $0.10

All the providers on our list below have no contract, so you don't need to worry about being locked in.

1. PayPal

Best for: Local charities that take on-site and/or online donations; if you want a PayPal donation button.

  • Discount rates for nonprofits
  • Users can donate via PayPal & Venmo
  • No contract or early termination fees
  • Fast and easy to get started
  • Account holds and freezes
  • Not the best customer service
  • Fees for extra features

According to an IPSOS study, people are more likely to donate if PayPal is an option.[1] So why not use it for your nonprofit?

PayPal offers discounted online processing rates for confirmed charities. In-person donations get the standard PayPal Zettle mobile processing rates.

  • Online: 1.99% + $0.49
  • Swipe, chip, and tap: 2.29% + $0.09
  • QR code transactions ($10.01 or more): 1.90% + $0.10
  • QR code transactions ($10 or less): 2.40% + $0.05

You need to sign up for a PayPal business account and register as a nonprofit to get the discounted processing rate. Your charity must also be registered with the IRS as a 501(c)(3).

You can take PayPal and Venmo donations on your phone via QR code scan, which is great for on-site fundraisers. You can also easily add a "Donate" button to your website or social media page.

The downside is that the processing fee is high if most of your donations are in smaller amounts. A $10 online donation will cost $0.69. But many feel that having a PayPal button is worth it.

If you're a larger nonprofit, the next couple of processors on the list can help you save more.

2. Dharma Merchant Services

Best for: Nonprofits that receive at least $10,000 per month in donations.

  • Discount rates for nonprofits
  • No contract or early termination fees
  • Gives back to charity
  • Extra fee for gateway
  • Usually only works with larger businesses
  • $49 account closure fee

Dharma has a long history of supporting nonprofits. They donate a portion of their profits to charities each year, so even your processing fees are doing good.

Furthermore, Dharma offers nonprofits a discounted rate (off of their already low rates!). Dharma will also make sure your account is properly classified, so you're getting the lowest interchange rates possible.

The nonprofit rates are:[2]

  • In-person: Interchange+ 0.10% + $0.08
  • Online: Interchange + 0.10% +$0.11
  • In-person Amex: Interchange+ 0.20% + $0.08
  • Online Amex: Interchange+ 0.20% + $0.11
  • $20 monthly fee

However, there are some extra costs. If you take online donations and need a gateway, there's an extra cost of $10/mo + $0.05/transaction.

The $20 monthly fee gets you access to mobile processing, a virtual terminal, easy payment links, and online reporting tools. But it could be tough for smaller nonprofits if you don't have steady donations.

3. National Processing

Best for: Lowest nonprofit processing rates, especially if you receive smaller donation amounts

  • Special nonprofit rates
  • No long-term contract
  • Free equipment offers
  • Conditions to waive termination fee
  • May have other software fees

National Processing is known for offering some of the lowest processing rates on the market. The same is true for their special nonprofit rates.[3]

The discount nonprofit rates are:

  • Online & in-person: Interchange + 0.12% + $0.06
  • $9.95 monthly fee

All users get free mobile processing, payment gateway, and virtual terminal. You can also be eligible to receive a free mobile reader or terminal.

National Processing doesn't have a contract, but there are some conditions to waive the termination fee. You must have a lower competitor quote in writing. If National cannot match or beat the offer, then they won't charge you a termination fee.

If you process at least $10,000 per month, National Processing will award you a $500 Visa gift if they can't beat your current processing rates.

4. Payline Data

Best for: All types of nonprofits

  • Discount rates for nonprofits
  • No contract or early termination fees
  • 2-month free trial
  • $25 monthly minimum
  • Fees for some extra features

Payline Data is another one of our top recommended merchant account providers. It doesn't publish special nonprofit rates, but we talked to a rep to get the details.

For nonprofits, the processing rate is:

  • Online & in-person: Interchange + 0.10% + $0.10
  • $10 monthly fee (first 2 months free)

Compared to National, Payline's rates are better if you receive larger donation amounts. But the two are very comparable.

Payline also gives you the option to add a surcharge so the donor can cover the processing fee. This way, you can get 100% of the donation.

One thing to note is that there is a $25 monthly minimum. That means if you didn't process enough to add up to this minimum, you'll still be charged $25.

5. Square

Best for: Small charities that want to get started fast; seasonal charities

  • Simple flat-rate pricing
  • No contract; no monthly fees
  • Fast and easy to get started
  • Free mobile swipe reader
  • No discount nonprofit rates
  • Account holds and freezes

Square is one of the best processors for micro-businesses because it's so easy to set up. You can open an account and start taking donations right away. However, there are no discounts for nonprofits.

But since there are no special rates, you can get started quickly without having to prove your charity status or complete other paperwork.

The standard processing rates are:[4]

  • In-person: 2.6% + $0.10
  • Online: 2.9% + $0.30
  • Over the phone/key-in: 3.5% + $0.15

Is Square free for nonprofits? Unfortunately, Square is not free and does not offer discounted rates for nonprofits. However, if you make over $250,000 per year from donations and other purchases, you can talk to Square about a custom rate.

There are no monthly fees. If you don't process anything in a month, you don't pay. This also makes Square ideal for small seasonal charities.

Square has perhaps the most powerful free POS packed with features. You get free mobile processing, payment gateway, virtual terminal, and an online store.

There are many ways to accept donations. You can take cards in-person, online, add buttons to social media, or send a payment link.

6. Stripe

Best for: Large global nonprofits that only receive donations online.

  • Discount rates for nonprofits
  • No contract or early termination fees
  • Advanced customization
  • Accepts global payments
  • Account stability issues
  • Need a developer to make use of tools

Stripe is one of the most popular credit card processors for online businesses. They don't publish their discount pricing for nonprofits, but the rate is usually 2.2% + $0.30 per transaction. You'll need to speak to a rep to get your personalized rate.

To qualify, you need proof of your 501(c)(3) status. And at least 80% of your funds must be from tax-deductible donations.

Stripe is ideal for large global nonprofits that take donations from all over the world. It can process payments in over 135 currencies.

Stripe is best known for its advanced API tools to create a completely customized online checkout experience. You can create a professional donation form. However, it's best if you have a developer on your team to make full use of them.

Some large charities that use Stripe include UNICEF and NPR.

7. GoFundMe Charity

Best for: Crowdfunding donations; if you don't want to sign up with a processor.

  • Fast and easy to get started
  • User-friendly platform
  • Exposure for your charity
  • No custom website
  • No flexible payment options

GoFundMe is known for personal crowdfunding, but charities can also set up a page on the platform.

The processing fee for charities is 2.2% + $0.30. There is no fee to use the platform.[5]

You may like this option if you just want to set up a simple donation page through GoFundMe. You don't need to sign up with a credit card processor. The platform will deduct the processing fees.

You can create a customized fundraising page with your logo, sell event tickets, manage donor data, and receive year-round donations.

Plus, GoFundMe is a trusted platform to spotlight your campaign. But the downside is that you don't get flexible payment options or your own custom website.

How We Chose the Best Credit Card Processors for Nonprofits

Nonprofits have unique needs compared to other businesses. To find the best providers, we looked at these factors:

  • Discount pricing for nonprofits (exception is Square)
  • Reputation for working with nonprofits
  • Transparency
  • No contract
  • Setup and ease of use
  • Can accept credit cards in many ways
  • Good, well-rounded features
  • PCI compliance

We found different providers ideal for different types of charities (small, large, on-site fundraisers, online, global). No matter the scale of your operation, you'll find someone that fits your needs.

Can Nonprofits Get Free Credit Card Processing?

Unfortunately, credit card processors cannot offer free processing, even to nonprofits. The best they can do is offer a discounted rate.

However, there is a way for you to avoid processing fees. You can pass it on to your donors. Charities are one special case where donors are more likely to help cover your processing fees.

A lot of providers (like Payline) offer an option at checkout to add a surcharge to the donation amount. It can be stated clearly that this charge is to help cover processing costs.

Read this guide on credit card convenience fees to learn more about surcharges.

Bottom Line

Credit card processing fees are unavoidable, but there are providers who can give you a discount.

If you're a small charity, look into PayPal because it's easy to set up and there's no monthly fee. But if you're a slightly larger organization, check out one of the other full-service providers (like Dharma, National, or Payline).

References

  1. ^ "Online Payment Experiences of Merchants": 2018, PayPal.
  2. ^ Dharma Merchant Services, Nonprofit Rates, Retrieved 10/20/21
  3. ^ National Processing Pricing, Retrieved 10/22/21
  4. ^ Square Pricing, Retrieved 10/22/21
  5. ^ GoFundMe Pricing and Fees, Retrieved 10/22/21

Anna G is a contributing writer at CreditDonkey, a credit card processing comparison and reviews website. Write to Anna G at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.


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