If your nonprofit organization is thinking about utilizing a payment processor, you may have questions about how the process works. It’s a simple five-step process, one that benefits both your and your donors.
Step 1: The Donor Makes a Contribution
The entire process starts with the donation. The donor makes a donation either online, in person, or via mobile app, paying via credit or debit card. This can be a cash donation or a payment for merchandise, event tickets, or organization membership.
Donors can make their donations via computer, tablet, or smartphone. If you’re hosting an in-person event, you may even set up a payment kiosk or terminal to accept live donations in real time. Most newer terminals can accept either card swipes or contactless payments via smartphone (Apple Pay, Google Pay, etc.) or NFC-capable credit/debit cards.
Step 2: The Donor’s Card Information is Processed
After the donor makes a payment, that payment must be processed and verified before funds are available to your organization. This step begins as soon as the donor’s payment information is entered into an online form or, for physical transactions, swipedor scanned.
For online transactions, the payment gateway ensures that the donor’s card is not fraudulent and ensures that the donor is a real human being and not an online robot. This is done by transmitting information entered to the payment processor, which then matches the card number with the issuing bank, matches the donor’s name and address with that of the recorded cardholder, and checks the card’s security code.
For in-person transactions, this process begins when the payment terminal transmits card data to the payment processor after the card is swiped or scanned.
After the card is verified as legitimate, the verification process continues by transferring information between the payment processor, the issuing bank for the donor’s card, the card brand, and the acquiring bank for your organization. The transaction will either be approved or not.
If the donation is rejected you’ll received notification of that so you can alert the donor that their transaction was unsuccessful. If the transaction is approved, the payment processed continues to the next step.
Step 3: The Funds Transfer is Initiated
Once the transaction has been verified, the payment processor initiates the funds transfer process. The funds donated will be electronically transmitted from the credit card company to the acquiring merchant account.
Step 4: The Donor’s Information is Stored in the Nonprofit’s Database
Immediately after the donor clicks the “donate” button or swipes their credit card, information about the transaction can be transferred from the online form or physical terminal to your nonprofit’s system. Depending on the information you collect, you may receive the donor’s name, street address, email address, and phone number. You need to transfer this information from the payment gateway to your database so you can use it for future fundraising efforts.
In many instances, the payment gateway seamlessly integrates with your database or CRM system. In other instances, you may need to export a file from the payment gateway and then upload it to your internal system.
Step 5: Funds Are Deposited in Your Account
The payment process ends when the funds donated are finally deposited in your bank account—minus processing fees, of course. This typically takes one to two days after the initial transaction.
Is Your Nonprofit Ready for Online Payment Processing?
If you’re looking for a payment processor that understands nonprofit organizations, turn to GIVE BACK GATEWAY. Our nonprofit payment processing experts can help you implement giving solutions that make it easy for your organization to both accept and manage online and mobile donations. The process is easy and our service is second-to-none. Contact us today!
Contact GIVE BACK GATEWAY today to to learn more about payment processing for your nonprofit organization.