How Local Churches Can Use A Merchant Account For A Financial Boost
One of my friends recently confessed to feeling bad about not having cash to put in the church collection plate on Sunday mornings. She says, “I don’t carry cash anymore … I pay all my bills online. I don’t even write checks … and I forget or am too busy with the kids to get cash out before Sunday service …”
As electronic services continue to change the financial landscape, fewer people carry real money. More churches are realizing that to stay alive they must modernize and promote technologies that facilitate giving. A well-configured merchant account is a great tool churches can use to encourage giving.
Having a merchant account allows churches to accept credit or debit card payments from church members. Donating or tithing with a credit or debit card is simple for members of the congregation, and research shows that having the ability to accept payment cards can significantly increase the volume of financial giving for religious communities, many of which are struggling to make ends meet.
There are several benefits to setting up a merchant account for your church. With a merchant account, your church can:
• Accept donations online at your church website.
• Accept debit and credit cards by having a debit machine on site
• Process cards with a wireless terminal or mobile device, ideal for bazaars / fundraisers
Another great benefit of having a merchant account is that it allows your church to accept “recurring” payments. Members of the congregation can set up automatic monthly donation plans on their cards every year, month or week, as they see fit.
Other advantages of investing in a direct business account for your church include:
• Lower transaction fees as a non-profit organization. A good representative can access reduced or waived service fees for their church.
• Your church’s name on credit card statements: If your church has a real or direct business account, the name of the church will be on the donor’s statement and on all receipts. This makes tax collection easier. If you make an online donation to a charity through a “third-party processing” service, it is often the processor’s name that appears on your receipt.
• Control: With a direct business account, you control the direction and deposit of funds in the church accounts. There are no intermediaries or anyone else to control the time and flow of your deposits.
• Convenience – Funds and gifts donated through a merchant account are deposited into your bank with the push of a button.
Depending on your congregation and the general sentiment of the group around the idea of mixing payment cards in a spiritual setting, certain issues of concern may arise.
For example, a church in Vancouver was uncomfortable with the idea of building debt through the use of credit cards and chose to use a debit machine programmed to accept only debit cards. The machine is placed on a stand inside the church in a cozy private foyer. There is always a constant flow of people using the machine before or after service to collect.
Other churches encourage the use of credit cards to facilitate donations to various ministries and even promote their payment card service in Church newsletters and bulletins. Several churches in Ontario inform their parishioners of the monthly fees and charges for the service through advertisements.
With so many options and variations in church business accounts, it can be confusing which approach may be best for your congregation. My typical advice would be to consider the needs of your church plus the size and sophistication of the congregation and staff.
A large church with a strong finance department, a large number of financially supportive parishioners, and a good community outreach can do well with a full-service merchant account. A smaller church may find it easier and more cost effective to simply set up a “debit only” machine that is easily accessible to parishioners.
Costs and fees
If your church merchant account is properly set up as a non-profit organization, your monthly service fees can range from $ 15 or $ 20 per month to as much as $ 40 or $ 50, depending on the processing company. or the bank of your choice. Your fees should generally be fairly low and should more reflect the ‘cost of trade plus’ pricing model, meaning your fee would only be a fraction higher than the rate that the credit card company charged the bank. initially. Definitely stay away from ‘tiered’ fee pricing if you can. For example, if the provider offers you a 1.70% “plus” rate, that is indicative of tiered pricing.
Equipment such as terminals, mobile card readers, etc. they can be bought, leased or rented. Team flexibility is often the preferred approach. The direct purchase of equipment is the most profitable solution for churches with sufficient funds.
The process for setting up a merchant account is actually quite simple. There are several payment processors that provide this service to churches. Once you have chosen the ‘best option’ for your parish, simply complete the application and establish the merchant account. After that, the rest is easy. If you are setting up donations online, you can easily add a secure payment link with an attractive graphic to your web page.
If you go with a terminal or other physical equipment, once the merchant account is established, the hardware is programmed for you and shipped to your church. In almost all situations, the computer is configured to be “plug and play”.
Regardless of the solution you choose, each supplier company has a customer service department with agents who are available to help guide you over the phone.
