If your school or organization is starting an online fundraising campaign, you may be wondering about the benefits of using a merchant account and gateway, integrated payments like DoJiggy Payments, or PayPal. What are the benefits and fees associated with these options? How do you choose which is the better option for your organization? What if you already have a PayPal account – should you just use that?
All payment processing options have advantages, so your choice will depend on your organization’s needs and budget.
DoJiggy Payments by WePay
We have many organizations that hold an annual event as their primary fundraising initiative for the year. Be it a fundraising golf tournament or a walk-a-thon, they need to process online payments associated with only one or two events or campaigns each year. We also work with many small nonprofit organizations and schools with low monthly payment processing volume (under $5,000). These organizations don’t want to pay monthly fees or maintain an account year-round for the privilege of processing payments when they need to.
For organizations processing credit card payments for only a few months each year, DoJiggy Payments is most often your best choice. With DoJiggy Payments, the fee structure is simple. You are charged a flat-rate percentage of each sale plus a $.30 transaction fee. There are no ongoing or monthly fees or minimums.
The biggest advantages of DoJiggy Payments include:
- You can sign up right from your administration area without a lengthy application
- The fees are fair and easy to understand
- There are no monthly, annual, or PCI fees or contracts
- You don’t have to have 501(c)3 status to get a DoJiggy Payments account
The biggest limitation to DoJiggy Payments is:
- The account is only associated with your DoJiggy fundraising website(s). You cannot use it for processing outside of your DoJiggy sites.
DoJiggy Payments has a very similar fee structure to PayPal, and for this reason, is a great alternative to PayPal. The biggest downside of PayPal is that your constituents must make payments on PayPal’s website directly. This extra step of leaving your fundraising website and going to PayPal can cause confusion and hinder donations. In fact, we see around 6-9% of PayPal donations end up in PayPal Pending status – meaning that administrators may have to follow up with donors to receive payments.
A merchant account allows you to accept credit and debit cards (and optionally echecks) via an online gateway and receive funds directly in your designated bank account. It is akin to a line of credit, as you will receive credit card payments before your constituents actually pay their credit card bills (usually within 2-3 business days of taking the online payment authorization). For this reason, you must apply for a merchant account by providing your business or organizational documents, such as a 501(c)3 designation for US nonprofits. A designated signer is required on the account and some newly formed organizations may not be eligible for a merchant account. The application process is quite simple with us, but you should allow at least 2-3 business days to be up and running.
The biggest advantages of Merchant Accounts include:
- Using a merchant services account allows your organization more flexibility and functionality.
- You will have an Authorize.net virtual terminal (where phone and fax orders or donations can be processed) and can use mobile payment processing with our merchant accounts.
- Organizations can often receive better credit card processing rates when using a full merchant account
The biggest disadvantages of Merchant Accounts are:
- Merchant accounts generally carry a monthly service fee, which can run upwards of about $20/month. For organizations that process thousands of dollars per month, these fees represent a very small percentage of fees and will be easily absorbed into the payment processing costs.
- Merchants must maintain and report on PCI compliance. Non-compliance fees apply.
DoJiggy Payment Processing Services vs. PayPal
Many organizations come to us with a PayPal account. While we support PayPal, our integrated services provide benefits that PayPal simply cannot. Our processing benefits include:
- Better User-interface. No more sending donors to PayPal to make payments and no more PayPal Pending orders to worry about.
- Your organization will receive funds directly into your designated bank account without the need to request funds from PayPal.
- Administrative payments or payment retries by an administrator cannot be handled with PayPal.
Whether you decide on a merchant account or DoJiggy Payments, we are here to assist you with your questions and setup in Sales.