Complete Guide To Payment Gateways For Charities

Charities have long been under pressure to get the most value from every donation. This pressure appears likely to increase, at least in the near future. Now, many charities are also under pressure to use a payment gateway for charities that also reflects their values. This can be a significant challenge. Fortunately, it can be met by following best practice guidelines.

What is a payment gateway?

A payment gateway is an intermediary between payers and payees, for example, charities. The payment gateway handles the technicalities of payment processing. For example, in the case of GoCardless, it will securely capture the customer’s bank details. Then, when a payment is created, GoCardless will present it to the payer and their bank in the correct way.

Payment gateways offer three main benefits. These are security, simplicity and affordability. Arguably, security is the most important. It’s a sad reality that payment data is hugely attractive to malicious actors. Technology can do a lot to protect against this threat. Leveraging technology does, however, increase the complexity of payment processing.

Using a payment gateway resolves the issue of complexity. By creating simplicity, it also improves affordability. It relieves the payee of the need to provide the infrastructure and staff to take payments securely. Instead, the payee just pays a small amount to the payment gateway for the use of their facilities.

Cost savings were one of the main reasons why the Norwegian Refugee Council decided to move to GoCardless. Reducing the cost of processing donations was key to helping them to achieve their aim of ensuring that at least 90% of all their revenue was spent on their cause.

Payment gateways for charities and non-profits

Charities and non-profits often benefit hugely from using payment gateways. The nature of the charity/non-profit sector means that there is often a high level of reliance on volunteer labour. 

What’s more, when there is a budget for paid staff, the priority is unlikely to be for IT/technical staff. It is more likely to be for either fundraising or for the work the charity/non-profit does.

It therefore generally makes perfect sense for charities and non-profits to use payment gateways. Essentially, this is just an extension of the managed IT services that are common in business.

Best three payment gateways for charities and non-profits

If you’re looking for a charity donation payment gateway, the three main names are Stripe, PayPal and GoCardless. Here is a quick guide to each.

Stripe

Stripe is probably best known as a card-payment gateway. It’s actually a robust all-in-one payment-management solution. For example, it can be used to issue invoices as well as to collect the payments for them.

Pros

• Can take payment in most countries globally.

• Can be used for real-world payments as well as online ones.

• Lots of scope for customisations through partner integrations and the API.

Cons

• Currently works on the assumption that you will use developers to integrate it into your website. This is a reasonable assumption for larger businesses and charities. Smaller ones, however, may not find Stripe particularly user-friendly.

• Businesses and charities that don’t have development staff may struggle to get the support they need.

• Although Stripe does support more than cards, it’s very much a card-first company. Taking card payments can be expensive.

PayPal

PayPal is an ewallet rather than a payment gateway. This means that it is funded from other sources (e.g. a bank account or a payment card). The funds held in the ewallet can then be spent anywhere that accepts the ewallet.

Pros

• Very easy integration even for small merchants and charities.

• The brand is widely recognised amongst consumers (and businesses).

• Can take payments in most countries around the world.

Cons

• Relies on payers either keeping funds in their account or having up-to-date payment details it can charge. This leaves it very vulnerable to payment failures.

• Very expensive (as it has to pay the payment method’s fees as well as charge its own).

• The usage base is not as wide as for cards or bank payments.

GoCardless

GoCardless focuses on taking bank payments. Merchants and charities have the option to manage their payments through a dashboard, a partner integration or the GoCardless API.

Pros

• Supports bank payment schemes in both Australia and New Zealand as well as international markets. 

• Comes with value-add tools such as Success+ to minimise both fraud and payment failures.

• Award-winning customer-support team.

Cons

• International coverage is extensive but not yet global.

• While GoCardless does support one-off transactions (both via standard bank payments and via PayTo), bank payment is not, yet, the default consumer choice for these.

• Charities may find themselves needing to support another charity donation payment gateway to ensure they have options for all customers.

Key considerations for choosing a payment gateway for your charity

Here are the key considerations you should keep in mind when choosing a payment gateway for your charity.

Security

This speaks for itself. Any breach of payment security could have disastrous repercussions for any charity.

Ease of use

Ease of use tends to be particularly important for charities. As previously mentioned, they tend to have minimal in-house administrative staff. This means they lean heavily on volunteer support. Some charities may also have to train a lot of staff/volunteers in short periods for intense fund-raising drives. This means that ease of use often has to be a top priority.

Customer support

Customer support is something you’re probably only going to need occasionally. When you do need it, however, you need to be able to rely on it. At a minimum, look for a charity donation payment gateway that still offers a phone number. Ideally, look for one that is known for providing high-quality customer support.

Processing fees

Processing fees may not be your top consideration. They will, however, probably be a consideration, quite possibly an important one. In addition to looking at the fees themselves, also look at the fee structure. Make sure that you’re totally clear on what you would pay for any given transaction.

Flexibility

Some payment gateways for charities require you to fit into their mould. Others will try to be as flexible as they can about meeting your needs. If you’re considering the former, make sure that you really do fit into their mould. If you don’t, or if your circumstances change, you could end up in a very frustrating situation.

We can help

GoCardless is a global payments solution that helps you automate and schedule payment collection. With GoCardless, you can easily collect recurring payments from regular donors. Using Success+ helps to minimise payment failures. You can also collect one-off donations using either regular bank payments or PayTo.