Donors are asked to contribute to so many worthy organizations that it can be difficult to decide which ones to support. One key metric donors may use to help them with that decision is how much of a contribution is actually helping the cause and how much is used to pay for administrative functions such as staff salaries and fundraising costs.
Credit card payment processing is one of those fundraising costs, and you will be pleased to learn that nonprofit organizations actually have more control over those costs than you may think. Pricing varies from vendor to vendor, and once you understand how different models work and where to look for hidden fees, you can decide whether or not you’ll save a greater percentage of those hard-won donations by changing providers.
The two common pricing models are bundled pricing and cost plus pricing. With bundled pricing, transactions are assigned to a processing category, each of which has its own rate. The categories typically include debit cards, qualified or standard credit cards, mid-qualified cards, and non-qualified cards (reward cards and international cards). The pricing for each category maps to the interchange rate - the rate charged by the card association for each card type (MasterCard, Visa, American Express).
It makes sense for the pricing to fluctuate with the interchange rates, but here’s the problem...the bundled rate combines everything together, making it impossible for you to know how it breaks down. Merchants and nonprofit organizations collectively pay millions of dollars a year in overcharged interchange.
Cost-plus pricing is more transparent because you know how it breaks down. Each interchange fee is identified, as well as the processing mark-up, so you can see exactly how your cost is calculated. Payway operates a cost-plus pricing model so that you can be confident you’re not being overcharged and there aren’t any fees hiding in the math.
If you want to learn more about your potential savings, we recommend that you take a closer look at your payment provider’s pricing methods and your processing records. Better yet, we’d be happy to review them with you. If we think you’re in good hands and getting a fair deal, rest assured - we’ll tell you.
Learn more: Request a free cost analysis!