The issue for many small and medium sized charities is that they do not have the transaction volume required to negotiate a good deal directly with their bank or merchant service provider. This leaves many charities paying through the nose for their payment processing, or worse – deciding not to offer online donations at all. We have compiled three top tips for reducing your charity payment gateway costs:

1. Avoid using a fundraising website for processing donations on your website

The difficulty associated with setting-up a merchant account has led to many charities to link their website’s donate button to a fundraising website such as: JustGiving, Virgin Money Giving or BT MyDonate. This approach is far from ideal, as redirecting donors to third-party branded fundraising websites is a no-no. A study conducted by Network for Good showed that people give on average 38% more via charity-branded donation pages than through a generic fundraising site. In addition to this, some of these providers charge even higher transaction fees than the banks; in the case of the market leader, the fee is 6.3% of the donation, plus 5% of the Gift Aid!

2. Use a specialist charity sector provider

There are a number of reasons why it is a good idea to use a charity-specific payment gateway, such as shared values and Gift Aid processing. The majority of payment gateways out there charge their fees based on the volume of payments processed, and that means smaller charities will be charged more per transaction than larger charities, such as Oxfam.

As charity sector specialists, Charity Checkout offers discounts for charities with an annual income below £1,000,000. This is to help us to promote our social goal of ensuring that online payments are accessible to all charities. However, as most corporate providers operate on a purely commercial basis, the low transaction volumes generated by small charities mean low profits, hence they charge larger charities less.

3. Offer donors the options to cover the transaction fee

It is always a good idea to offer the option for donors to pay the transaction fee for you, as this can significantly reduce your overall costs. While this is not something you will find with most payment processing companies, it is something Charity Checkout offers as part of the basic service.

What is Charity Checkout?

Charity Checkout allows charities to receive one-off and regular donations directly via their website and social media profiles, without the need for a merchant account. The service offers charities the ability to receive one-off and regular donations, create branded donation pages, run specific campaigns and track donations from multiple sources, or even sell items via their website.