Grow monthly giving and lower fundraising costs through eCheck acceptance
Wednesday, March 08, 2017
Thanks to advancing technology, online giving is now a main way nonprofits receive donations. When taking donations online it helps to offer multiple payment methods for donors. EChecks are a good alternative payment option for your donation page.
What is eCheck processing?
Put simply, eCheck processing, also known as an electronic funds transfer (EFT) or an automated clearing house payment (ACH), is a digital payment that is taken directly from a checking account. When used on a nonprofit’s website, a donor is prompted to type in their routing number and checking account number into the form. EFT payments are processed more quickly than paper checks and are a great option for nonprofits since these types of payments are easy for donors to make online.
Here is an example of how we accept eCheck payment online in 4aGoodCause:Big Brothers Big Sisters of Northern NJ monthly donation page
Why accept eChecks?
Below are some of the key benefits to eCheck processing for nonprofits (and why you should add this payment option to your donation page).
1. Processing fees are lower
Most credit card processing fees are between 2-3%. Authorize.net, one of the top eCheck processors, charges only 0.75% of each transaction with a $10 per month minimum. The majority of eCheck processors charge fees less than 1% for processing, making eChecks a better option than credit cards or third-party services for nonprofits accepting donations.
If a donation of $500 was made to your nonprofit, you would receive only $487.50 of that donation if it was made with a 2.5% credit card processing fee. If $500 was donated by eCheck, your charity would receive $496.25. A few dollars might not seem like much money but the larger the donation, the larger the amount of money taken for processing fees. EFTs are a great option for nonprofits who want to get the most out of their donations.
2. A safe payment option that reaches a wider audience
One reason eCheck payments have become so popular is that it is recognized as a safe alternative to putting a paper check in the mail. Paper checks place a donor’s routing and checking account number in plain sight and the check may be touched by as many as 20 human hands before clearance. eCheck payments are submitted in a secure, encrypted environment where only the account holder has access to the full account numbers.
In addition to being safe, eCheck payments are available to a wider range of people since checking account holders outnumber credit card holders. In 2014, an estimated 72% of American consumers had at least one credit card, while 93% had a checking account when surveyed in 2015.
3. Great for monthly giving
Echecks hold the highest donor retention rate out of all types of monthly giving payment options. Since eChecks are pulled from bank accounts, donors can set up consistent giving settings that stay in place as long as they choose to continue using that account. In contrast, credit cards expire. While donors can set up a consistent giving schedule with their credit card, expiration of the card will halt this process. This means you must track down the donors to get card updates such as new expiration date, new card number or address change. This gives a chance for the donor to opt-out of giving.
If you would like to make the transition to offer eCheck payments on your nonprofit’s donation page, check to see if your payment provider offers eCheck payment. Evaluate the cost, how you would implement it on your donation page and if it’s the right decision for you.
For 4aGoodCause clients it’s easy.