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Considerations for Selecting a Payment Processing Company
By: Bryce Collman

In today’s economic climate, churches are looking for new strategies that increase overall giving, stabilize annual giving trends, and make the process easier for their members and staff. Many have taken advantage of the benefits of online or kiosk giving, while others are investigating these options. 

In addition, some churches already accept credit and debit cards for other services, including online bookstores and registration fees for daycare, schools, camps, and special events. 

Below are suggestions to help you choose a payment processing partner that will help your ministry increase giving, control costs, and reduce administrative tasks using a streamlined system.

Partner on Principles
As with any other service, know who you are doing business with. Making the wrong decision can lead to a potentially expensive and time-consuming process to change your provider. Ask for references from other churches and try to select a processor who has values that resemble your own. Reputable companies will provide detailed proposals, review their contract in detail, and investigate the terms of your existing contract before any documents are signed. 

Match Giving Methods to Church Values
Many churches have not taken advantage of electronic giving because they are not comfortable with their members giving using a debt instrument (credit card). These churches have other options for electronic giving. 

ACH, EFT, and debit only are all tools that can be used on your website that make deductions directly from the donor’s checking account to eliminate the possibility of credit card debt. Ask potential provider for “Debt Free” options that help to establish recurrent online, kiosk, and face-to-face giving.

Bank Relationships Do Not Equal Lowest Cost
Often, churches turn to their bank for processing services. Though your bank may be a trusted source, in many cases, they are not electronic payments experts. Most banks contract this service out to a third party. 

This arrangement not only adds another layer of cost, but the bank may not have input on pricing or service. Partner with a company that focuses on faith-based and nonprofit organizations, as they will be more able to provide solutions for your needs  

Review Pricing Strategies to Uncover Hidden Costs
There are a variety of pricing strategies in the payment processing industry. Most are designed to benefit the processor not the church. Large national corporations have long enjoyed the benefits of interchange or wholesale pricing and you should expect the same. 

Rates are affected by the type of card used and how the transaction takes place. Debit cards are less expensive to process than credit cards, and there are many different types of credit cards all with various interchange costs. 

In addition, face-to-face transactions cost less than Internet transactions because there is less opportunity for fraud. Interchange pricing ensures that each individual transaction qualifies at the best possible rate and allows you to know exactly how much the processor is marking up the rates. Other forms of pricing allow processors to hide their mark-up and increase their margins arbitrarily. 

Though it is always important to obtain multiple quotes, requesting interchange pricing from all the companies you are considering will ensure you receive the best pricing available and allow for an easy comparison. If you are unable to receive interchange pricing quotes from a payment processor, you can obtain the wholesale prices on both Visa and MasterCard’s websites. 

Explore Integration Options for Church Software
Many software companies have preferred processing partners, but, in most cases, you are not required to use their services. The key connectivity component is called the gateway. Any payment processor that can communicate with the gateway can provide processing services for you. 

A well-informed processor will know the gateway associated with your software solutions. If you have not selected software, a well-informed processor should be able to provide options after understanding your needs. Explore your software and payment processing options to control your costs.

Consolidate your Services
Payment processing accounts all come with certain minimum fees. While electronic giving may be the primary reason for employing the services of a payment processor, review other needs that you church has to accept credit, debit, or ACH transactions. By selecting one company to process all transactions, you eliminate the risk of duplicating fees from multiple providers, thereby decreasing your overall cost.

Avoid Unnecessary Fees
Some processing companies charge fees with no real costs associated with them simply to increase their revenue. Application fees, merchant account setup fees, and batch fees should be avoided. When asking for a proposal request, make sure that it clearly covers these and any other fees the processor might charge.

With several payment processing companies to choose from, it is important to select one that fits your mission, vision, and budget. By matching giving options to your church’s values, understanding pricing strategies, exploring integration options, consolidating services, and avoiding unnecessary expense, you can ultimately choose a payment processor that will help grow your ministry through sound financial stewardship. 

Bryce Collman is founder/chief executive officer of Ardent Giving Solutions, www.ardentgivingsolutions.com.

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