Calculating how much merchant services will cost you can be complicated.
There are various companies that you can choose to be your merchant services provider, and each of them offer a different set of price options.
Then, you have to choose and configure your payment gateway, which is a separate component in the process even though it’s often taken care of by your merchant account provider.
But the real difficulty lies in knowing how many transactions you will be processing consistently and then picking a provider that charges you a reasonable percentage according to the amount you process each month.
How Flat Rate Percentages Work
If you don’t know exactly how little or how much you will process, it’s tempting to go with a flat rate percentage charge. This is what PayPal and Stripe offer.
Both PayPal and Stripe charge 2.9% plus 30 cents per transaction.
No matter what card your donor uses, or how much you bring in this month, that flat percentage is the same.
It’s simple. It’s predictable.
But it’s not always the best price for your organization.
Flat rate percentages hide the amount you’re paying per card.
Having one rate makes reading statements easier.
But with this pricing model, you’re not able to see how each specific card type is being charged as they all come in at the same rate.
For example, most merchant accounts charge significantly more for American Express card transactions than Visa or Mastercard.
Visa and Mastercard charge merchants anywhere from 1.9% to 2.87%, but AMEX cards can charge you as much as 3.5% per transaction.
Depending on the volume of transactions you see every month, that can be a significant difference!
With a flat rate however, you wouldn’t be able to tell if a relatively small number of your donors are using AMEX, which means you could be paying for AMEX transactions that aren’t really happening.
Flat rate percentages penalize fundraising success.
That flat rate of 2.9% plus 30 cents might be okay this month—if you’re only pulling in $5,000 in donations.
But what happens when your development plan and all your hard work starts to kick in? Now you’re seeing $200,000 a month come in through your donation pages.
At 2.9% plus 30 cents a transaction, your organization will be bleeding transaction processing fees. The higher the volume of transaction processing, the higher your cost will go up.
The better you get, the more you grow, the more you will be punished with higher costs.
That doesn’t feel right.
For some organizations, the Stripe and Paypal price structure makes sense. But in our experience, when they begin to grow, they need to move on to another provider who can offer a better pricing model for higher transaction volumes.
So we went looking for a better solution…
Which is why RaiseDonors is a proud partner of EVO Payments.
EVO Payments Cost Plus pricing model offers nonprofit organizations a better price for processing high volumes of donations per month.
It’s not a flat rate percentage with all of the disadvantages we discussed above.
EVO’s Cost Plus makes transaction fees very transparent so you can see what the various card brands are costing you. You can also see how much EVO is making off each transaction.
Transparent, honest, and detailed.
Better than that, though, is that many of our customers are seeing big savings on their transactions with EVO Payments.
Just take a look at the table below (These are real customers with their real monthly numbers, but we’ve changed their names for privacy)…
As you can see, all three of these RaiseDonor’s clients save thousands of dollars each month on merchant processing fees!
So, are you paying too much in merchant processing fees?
Contact us today and see how you can get the best merchant processing rate possible for your organization.