When you begin researching online giving options, you may be overwhelmed by a number of new terms. You may wish to do some further reading before making a decision but these definitions will help you get started.
Transaction Cost: This is the real cost of each donation made through the service. It is usually presented in terms of a percentage and a set cost. For example, a transaction cost may be listed at 2.9% + 30¢. That means the cost to you, the church, for each transaction would be 2.9% of the total transaction, plus 30 cents. If someone gives $100 through the platform, the church would be charged $2.90 + 30¢ for a total of $3.20. The amount, from the $100 donation that would be deposited into your bank account would be $100 - $3.20 or $96.80.
Merchant Account: This is a special bank account that allows someone to accept credit cards. Some churches already have these if they take credit cards offline (i.e. through the church office.) Some services work with an existing merchant account. Others offer end-to-end processing, meaning they use their own merchant account for the transaction and then pass the proceeds on to you
Setup Fee: Some services charge an upfront cost to set up the service for your use.
Monthly Charge: Some services charge a fee every month for their service. Usually, you pay the same fee every month no matter how many contributions you receive. Others charge different amounts for different numbers of transactions. A few services charge no transaction costs because the fees are covered in the monthly fees. Others lower their transaction costs in exchange for the monthly fee. This monthly charge is important to consider and calculate into the transaction costs. This is especially true if you expect a small number of donations. If a service charges $20 a month and you have only four transactions a month, no matter what their transaction fee, you would be paying an additional $5 per transaction.
Text Giving: This is becoming very popular. Text giving allows people to give via text message. Here is how it works: Your church is given a special phone number. The giver sends a text message to that number with the amount they want to give. The first time they do this, they receive a reply with a link to a website. The giver goes to the website, signs up with their information and credit card and confirms their gift. The next time they want to give, they simply text the amount to the number, and they instantly receive confirmation of their gift. This is different from other services that charge the amount to a person’s phone bill. This allows them to link their giving to a debit or credit card.
Recurring Payments: Givers can set an amount and then set how often they would like to give it. It is then automatically deducted each week, month or another timeframe they select.
ACH and EFT: Electronic Funds Transfer (or EFT) has been used in churches for a while. It allows people to connect their checking account to their church and have money automatically withdrawn on a specified basis. Automated Clearing House (or ACH) is one method of doing this. If you have ever paid by check online, without using a physical paper check, you have done this. The per transaction costs of ACH are usually lower than the costs for credit cards.