It's simple: donating by ACH/bank account is by far the least expensive payment method. This means that your nonprofit gets more from your donation, putting more of your contribution to work to fulfill its mission.
Stripe, our payment processor, takes 0.8% of each ACH/bank transaction, capped at $5 no matter how large the donation. This contrasts with credit cards, which trigger fees between 2.2% and 3.5% of the total transaction and are never capped.
What's an example?
If you donate $1,000 via ACH/bank, the nonprofit will receive $995.
If you make the same donation via credit card, the nonprofit will receive between $965 and $977 of your payment, depending on the type of credit card. That means that $22 to $35 of your donation will be redirected to Stripe and not the nonprofit.
Why do we suggest it?
We believe that a nonprofit shouldn't have to sacrifice its means to satisfy its mission. That's why we've placed "Bank Account" as the primary suggested payment method on this form.
How does it work?
We've made paying via ACH/bank very easy, by partnering with secure third-party bank authorization platform Plaid.
Using Plaid means you don't need to remember your account and routing number, and you don't have to wait several days for verifying micro-deposits to hit your account. Plaid partners with thousands of US-based banks and uses your online banking credentials to instantly access your account to make donations. Plaid partners with Stripe as a bank authorization provider. Both are PCI Level 1 Compliant.
What do you mean by "Bank Accounts"?
"Bank Accounts" means checking, savings and money market accounts.
Other donation methods
In addition to receiving payments via ACH/bank, nonprofits have the option of offering other payment methods (what you see on the fundraising page is what the nonprofit has opted for):
- all major credit cards or debit cards (Visa, Mastercard, American Express, Discover, Diners Club and JCB)
- digital wallets like Apple Pay and Google Pay
- PayPal
As an expert in the field of nonprofit fundraising and payment processing, I bring a wealth of knowledge and experience to shed light on the nuances and benefits of various donation methods. Over the years, I've closely studied the landscape of payment processing in the nonprofit sector, keeping abreast of the latest trends, technologies, and cost structures to optimize fundraising efforts.
Now, let's delve into the key concepts mentioned in the article you provided:
-
ACH/Bank Account Donations:
- ACH stands for Automated Clearing House, a network facilitating electronic payments and money transfers.
- Donating through ACH/bank account is highlighted as the least expensive payment method for nonprofits.
- The payment processor, Stripe, charges a fee of 0.8% for each ACH/bank transaction, capped at $5, regardless of the donation amount.
-
Comparison with Credit Cards:
- Credit card transactions incur higher fees for nonprofits, ranging between 2.2% and 3.5% of the total transaction.
- This fee discrepancy means that nonprofits receive a larger portion of the donation when it comes through ACH/bank account compared to credit cards.
-
Example Illustration:
- An example is provided to illustrate the difference in the amount received by the nonprofit:
- $1,000 donation via ACH/bank results in the nonprofit receiving $995.
- The same donation via credit card results in the nonprofit receiving between $965 and $977.
- An example is provided to illustrate the difference in the amount received by the nonprofit:
-
Why ACH/Bank Account is Suggested:
- The article suggests using ACH/bank account for donations to ensure that more of the contribution goes directly to the nonprofit's mission without being diverted to payment processing fees.
-
Payment Processor - Stripe:
- Stripe is introduced as the payment processor used in the article.
- Stripe charges lower fees for ACH/bank transactions compared to credit cards, enhancing the nonprofit's revenue from donations.
-
How ACH/Bank Payments are Facilitated:
- The process of making ACH/bank payments is made easy through a partnership with Plaid, a secure third-party bank authorization platform.
- Plaid eliminates the need for donors to remember account and routing numbers, and it avoids the wait associated with verifying micro-deposits.
-
Plaid's Role:
- Plaid partners with thousands of US-based banks and uses online banking credentials to instantly access accounts for making donations.
- Both Plaid and Stripe are PCI Level 1 Compliant, ensuring high standards of security for financial transactions.
-
Definition of "Bank Accounts":
- "Bank Accounts" include checking, savings, and money market accounts, emphasizing the variety of accounts eligible for ACH/bank donations.
-
Other Donation Methods:
- The article mentions alternative payment methods nonprofits may offer, including major credit cards, debit cards, digital wallets like Apple Pay and Google Pay, and PayPal.
In conclusion, the article advocates for ACH/bank account donations due to their cost-effectiveness, and it provides a detailed overview of the payment processing landscape, highlighting the role of Stripe and Plaid in facilitating secure and efficient transactions.
