The Nonprofits Guide to Payment Gateways
When it comes to accepting payments online, things have come very far in the last few years with there now being many different options available. At Funraisin, we have always been payment gateway agnostic, we’ve worked with everyone depending on the needs of our clients, so I thought it might be a good time to create a bit of a list of who is who right now and what features they are offering. This article is geared towards Australian readers.
A quick history lesson
In the early days there was really only 1 option which was to integrate in with a Bank and to accept any kind of money back then a business needed to open a Merchant Account. Still common today these are required if you want to accept Eftpos or Credit card payments and they used to be mandatory for accepting online payments also.
Banks offered pretty basic functionality back then, you could login and view your payments received but that was about it, and integrating your website into their systems was often quite involved for developers to do, so an opening in the payments space was created and born from this were 3rd party Payment Gateways. These 3rd party companies act as a middle man to the banks and provide a richer experience for administering payments and refunds, etc and more importantly they simplify the development process by providing their own APIs so all of a sudden it was a lot easier integrating a website in with a payments platform.
Naturally they charge for their service but because they process a large amount of payments they able to negotiate good rates from the banks, so the banks dropped their rates and the middle men added in theirs so it evens itself out and the benefit is a much simpler developmemt cycle.
But the catch was that you were still required to have a merchant account with a bank — until not too long ago.
Going direct to a bank
Not for the faint hearted, but financially this has some benefits. Banks have very strict requirements (PCI compliance) and they generally also force you into a bunch of specific accounts with them to get the best rate, but their rates are pretty good and very negotiable. They will generally drop any per transaction fee and just take a % cut anf you can usually get that pretty low. NAB quoted me recently a range from 0.07% to 0.2% (thats a big range) but the upper range was really only for certain premium cards and international payments. Generally payments from standard local Visa and Mastercard cards you can expect to pay 0.07% per transaction.
The catch is though that it can be a lot of work for your developers and you will may have to get some kind of PCI compliance which can be costly and time consuming.
Using a 3rd party payment gateway
Another option is to go with a 3rd party payment gateway for your development integration and keep your merchant account with your bank. This way you get to work around the PCI compliance by leaning on your payment gateway’s own shared PCI compliance, but even this has changed recently with them being a lot stricter than what they used to be.
Regardless of whether you choose to use of the big 4 banks or a payment gateway, you will most probably be asked to setup a Merchant Account.
“A merchant services account is a specialized account that enables your business to accept credit cards, debit cards, gift cards and other types of electronic payment.”
If you end up going with a Bank to handle your payments then they will generally require you to open a merchant account with them, but when looking around for a non-bank payment provider you can often come across the option to use them as your merchant facility or if you already have one then you can often use your existing one and just use the 3rd party gateway as purely a gateway and nothing more.
The benefit of using a gateway for your merchant facilities are generally ease of setting things up, as it can often take a few weeks to get your merchant account setup if going via your bank. However, if you plan on accepting a lot of money online then banks will often be very negotiable in terms of rates
Some Australian payment providers that allow you to use them as your merchant as well as gateway are:
When it comes to accepting payments for online donations.. cost! When accepting online payments everyone takes a cut, some more than others — and that old saying of “everything is negotiable” really does ring true in the online payments space. My first piece of advice to any charity seeking a payment provider would be to barter like you’ve never bartered before.
Having said that there are some immediate stand outs for offering discounts to charities.
eWay offer charities (must have DGR status) a rate of 1.7% per transaction.
Pin Payments also offer a great rate for those with DGR status which is 1.4% + 0.30c per transaction
Another important aspect that is commonly overlooked and that is the ability to accept payments in the donors local currency. This might not be applicable to local events or charity websites but if you plan on expanding your event internationally then there are many benefits in being able to offer your site’s visitors in their local currency. In fact it can often result in greater donations when you remove the need for international sponsors to convert donation amounts in their heads.
That said, accepting international payments has never been very easy and generally requires multiple merchant accounts and so far the only bank offeirng this service has been NAB so regardless of what payment gateway you use you will have to open up an account at NAB and unfortunately you will need to open up an account for each currency that you wish to accept.
If you are interested in accepting multiple currencies then i’d suggest you first talk to one of the payment gateways that specialise in this area which currently are Pin Payments, eWay and BrainTree. Another option is to use PayPal’s PayFlow Pro product which we have used in the past for the Distinguished Gentleman’s Ride. You will still need to open up an account with NAB.
If you haven’t yet read our blog post on PCI compliance then check it out as this is fast becoming a hot topic for ecommerce merchants and charities accepting payments online in Australia.
As I mentioned above, if you decide to go with a Bank to accept your payments then you will most likely have to prove some level of compliance which itself can be costly to do.
If you end up going with a 3rd party payment gateway them make sure they themselves are level 1 PCI compliant. If they are not then I’d hang up the phone right now.
If they are level 1 PCI compliant then you need to know that you still might be required to at some point prove that you yourself are PCI compliant and to do so really depends on how you accept money online and how you connect to your payment partner.
If you are still here reading this and have decided that you want to use a 3rd party payment gateway that is proactive in the PCI space then I would recommend that you speak to Pin payments, eWay and BrainTree. In terms of integration, all of these providers are offering API’s that are specifically tailored towards Level 3 PCI compliance.
Your site. Your gateway choice.
We built Funraisin with your organisation in mind. And as each organisation has different requirements, especially when it comes to accepting donations, we’ve kept Funraisin flexible enough to integrate into the payment gateway of your choosing. Whether you’re already set up with a payment provider or you’re looking for some advice on a new gateway that may offer you more options, we’re here to help.
By default, Funraisin is enabled for three gateways that cater easily for recurring donations. These gateways include Braintree, eWAY and Pin Payments. But you’re not limited to those. In fact, we’ve integrated with a huge number of gateways within Australia and internationally — here’s just a sample…
Originally published at www.funraisin.co on August 26, 2016.