The Donation Maximization Blog

Nonprofits: 3 Reasons Why Online Payment Processing is Essential


Online Payment Processing

While there are some ideas from the private sector playbook that nonprofits are wise to avoid — like giving away a free set of Ginzu Knives with every donation (“but wait, there’s more!”) — there is one tactic in particular that is not just smart, but should be a basic staple: online payment processing.

In a follow-up article, we will look at some online payment processing options and highlight some strengths and weaknesses. For now, it is helpful to start by looking at the three key reasons why online payment processing needs to be at the top of your nonprofit’s to-do list in 2016.

1) It Supports the Omni-channel Experience

Just as when they are shopping online for anything from a video game to an airline ticket, today’s consumers want and expect a seamless, enjoyable and friction-free journey from beginning to end – or what the marketing world calls an omnichannel experience. Naturally, online payment processing is a core piece of this puzzle.

The same paradigm applies when we swap consumers for donors, and businesses for nonprofits. Donors, too, want an omnichannel experience, and nonprofits that offer online payment processing cater to this requirement. If it takes a donor more than 60 seconds to complete your online payment process, then you must re-visit your strategy and go back to the drawing board!

2) It Drives Transactions

As one might expect, there is another key reason why businesses have embraced online payment processing: it drives transactions. Indeed, for many consumers, out of sight is out of mind. Any logistical or administrative barriers that prevent them from acting upon their buying intention can – and does – lead to lost sales (note: the importance of a friction-less paying experience is not limited to the online world, and is driving “tap and pay” credit/debit cards and “pay with your smartphone” options in retail stores now that more consumers trust paying online or through their mobile app).

Similarly, online payment processing helps nonprofits make it as effortless as possible for donors to fulfill their desire to do good WHILE they are feeling that way. Otherwise, they may get distracted, forget to donate, delay their donation (“I’ll just wait until next Christmas like I always do”), talk themselves out of donating (“my car insurance premium just went up, should I really be donating?”) or direct their donation dollars elsewhere.

3) It appeals to Millennial Donors

And last but certainly not least in the discussion on why online payment processing makes sense for nonprofits (and again, businesses are leveraging this as well), is that it appeals to Millennials for whom paying online is quite ordinary. In fact, many Millennials conduct most of their transactions – from buying a latte to purchasing an iPad - through a mobile app or their desktop/laptop. Yes, cash is still king, but the digital version is far more regal than the “old fashioned” paper kind. In general, Millenials are a different breed and should be marketed to appropriately - take a look at our most recent blog on Millenials.

Choosing the Right Online Payment Processing Solution

The above lays out why online payment processing is a must for nonprofits. However, it is important to keep in mind that not all solutions are created equal. Some are more trusted and recognizable, while others impose excessive fees. Some feature seamless integration with nonprofit platforms, while others do not work and play well with other systems in the ecosystem. Some are better for smaller nonprofits, while others are suitable for larger organizations.

In a follow-up article that will be published shortly, we will shed some light on what to look for – and what to avoid – by reviewing three online payment processing options that are popular among nonprofits: PayPal, Network for Good, and DonorPerfect.


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