CC Processing
Overview
Credit card processing is how payments are handled when you use a credit card to buy something. A company processes the transaction to make sure there is enough money or credit. The company takes fees for processing the transaction. This whole system makes sure payments are made quickly and securely.
There are ongoing discussions how to handle credit card fees for donations. One option to absorb these fees, which can reduce the net amount received from donations. The other option is to display the fees on donation forms and ask donors to cover them, ensuring that the full intended donation amount goes to the cause.
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Here are several popular processing platforms being utilized:
PayPal
PayPal charges nonprofits 1.9% + 49 cents per donation. Stripe fees are 2.2% + 30 cents (non-Amex) and 3.5% (Amex). Note, PayPal imposes a 5% fee for non-U.S. accounts, usually outweighed by American donations.
Stripe
Stripe's advantage lies in customizable forms, though at an extra cost. PayPal is simpler, except for user confusion regarding account creation versus credit card input.
Stripe incurs an extra 0.5% fee for subscriptions.
Square
Square charges 2.6% + 10 cents for most cards, 3.5% + 15 cents manually.
Donorbox
Donorbox facilitates processor integration with a 1.5% extra fee.
In summary, platforms differ in fee structures, simplicity, and customization. The choice depends on user experience and cost balance.
A message a shliach sent
This ended up being a long post. Here's the TL;DR version: It's how to get $40,000 of credit card processing for 1.2375%. Plus a bunch of other perks for free.
There is a membership called Founders Card. It is not a credit card. It doesn't affect your credit score, and it isn't a way to borrow money. The term "Card" is actually a bit misleading (although they do send you a card). It is a membership service designed to benefit entrepreneurs and business owners.
The idea behind Founders Card is that you pay to join this membership service and they negotiate all sorts of discounts and benefits with various companies.
The membership offers hundreds of different benefits, some more valuable than others. There are a lot of travel benefits, such as status at various car rental companies (free status at Hertz, Sixt, Avis) and hotel chains (free status at Hilton, Omni), discounts on certain airlines, and discounts and privileges at many hotels.
It also offers various business benefits, like discounts at:
- Office Depot
- UPS
- Dell
- Fiverr (including years free membership)
There are many other benefits that may have potential value which I haven't really looked at yet.
However, the real money-saving value this membership offers - and this is the point of my post - is $40,000 of fee free credit card processing. You can get $20,000 free credit card processing with Stripe (new and existing accounts) and an additional $20,000 free credit card processing with Square (new accounts only), for a total of $40,000 of fee-free credit card processing.
I have already used this benefit and it absolutely works. I can charge someone's card $100 and receive the full amount in my bank, no fees at all.
The membership costs $495 a year if you are referred by an existing member (you can use my link below). Without a referral it costs $690 for the first year and then $595 per year.
If you use the full $40,000 of fee free processing, the $495 membership fee ends up being the equivalent of paying 1.2375% for credit card processing, which is about half of the normal rates! Plus you get all the additional perks for free.
Please note that as of now the free credit card processing is a one-time benefit, meaning the membership may only be worth it for you for the first year. They are constantly adding new benefits though, so there may be some new benefits that will make it worth continuing. Either way, you can always cancel at any time.
The referral sign up link is https://founderscard.com/membership?code=FCAVREMEL132
There is a referral benefit I hope to receive by my link being used, so please use the above link. It will also give you the discounted membership price.
There is a higher tier of membership called Founders Card Elite, which costs $995/year. This can potentially be worth it for you (for the first year), as they offer an additional $30K of fee free processing with stripe (for a total of $50K), in addition to the 20K with Square. An extra $500 fee for $30K of processing works out to 1.66% for the next $30K. So if you typically process close to $70K in a year this would be worth it for you.
However, even if it is worth it for you to pay the $995 for Elite membership, I would not recommend upgrading to FC Elite off the bat. If you sign up for regular membership they will often send you a promotional discount to upgrade to Elite for even less. And if they don't, you can always upgrade later for the $500.