By Gina Calvert

Church Credit Card Processing Simplified

If there’s one thing everyone agrees on, it’s that credit card processing is complicated. Fortunately, the way church credit card processing works is generally no different than in other industries. All organizations that process financial transactions face the same basic structure of payment processing. But it’s the individual practices of some of the players in the mix that make it hard to compare options.

Wouldn’t it be great to know the difference … to know where you have some control … to be able to keep more of your gifts?

Meet the Payment Processing Cast of Characters in Church Credit Card Processing

In church credit card processing, the following 6 entities are involved in every online transaction. We’ll introduce them in the order they appear on the pathway to funding. (Skip down to see how Vision2 operates differently):

The giver starts a gift on the church’s website. But churches don’t want to build their own giving software and get qualified to process online gifts. So they choose an online giving vendor.

But most online giving vendors are also not legally qualified for church credit card processing. Why? Becoming PCI Level 1-compliant to process credit cards is an expensive and time-consuming process. Therefore, they provide the giving software (serving as gifts point of entry, or PAYMENT GATEWAY), but a payment processor must transact the gifts.

Payment processors (also called credit card processors or merchant services) are the only ones legally allowed to transact financial transactions online. The payment processor is the actual recipient of your giver’s gift. (This means givers will be taken to the payment processor’s site to complete their gift. (Skip down to see how Vision2 manages this differently)

To begin, when the gift comes to them, two non-negotiable fees are assessed from the gift:

  • PAYMENT NETWORK (i.e. Visa, MasterCard, Discover, American Express)
    The network charges an Assessment Fee. This fee varies, depending on the type of merchant, the type of card used (cards with perks have higher interchange fees) and risk level of processing method (a card number given over the phone carries a higher risk.)
  • ISSUING BANK (i.e. Chase, Citibank)
    The bank that issued the card charges an Interchange Fee.

Secondly, the payment processor also subtracts its own per-transaction fee, and has the option to tack on:

  • A monthly service fee
  • The price of any equipment used to process transactions

Next, the gift is transferred to the online giving vendor, who may also charge:

  • A per-transaction fee
  • A monthly service fee

These fees are typically quite small, but they can add up for the church. As a result, many online vendors offer givers the opportunity to pay all transaction fees when they transact their gift. Naturally, monthly contract fees can take a much bigger bite out of gifts. So, look carefully at monthly contracts when comparing vendors.

Finally, the online giving vendor transfers the gift to the church’s bank account, minus monthly fees or other charges, such as for NSFs and chargebacks.

How Vision2 Operates Differently

When churches choose Vision2 for online giving, the difference in the church credit card processing begins at the givers’ level. First, they start and complete their gift on the church’s website (not the payment processor’s site). This helps their online gift feel as personal and secure as an in-person gift.

VISION2 (Payment Processor + Online Giving Platform)
Secondly, unlike most giving platform vendors, Vision2 is able to collect and process the gift directly. This is because we have made a significant investment to become payment processors for church credit card processing. This certifies us to process online gifts.

Next, consistent with the above structure, the BANK, and the PAYMENT NETWORK deduct their non-negotiable fees. We assess a competitive transaction fee and pass on any additional bank fees (NSFs, chargebacks) to the church.

Our dual role offers lower transaction fees than the cost of a separate payment processor and online giving vendor fees. This is another primary point of comparison between vendors to save on church credit card processing fees.

Lastly, with one less organization in the payment process and our unique relationship with the bank, Vision2’s dual status allows us to transfer funds quickly to the church. We offer givers the option to pay the fees themselves. Furthermore, we operate as a partner to the church with oversight into every aspect of payment processing.

3 Questions Every Church Should Ask About Church Credit Card Processing

With so many fingers in the pie, churches should clarify:

    1. What entities are involved in the payment processing pathway and what fees will be assessed by whom? Above all, it’s important to know how many of these entities your givers will encounter. Ideally, your giver should only deal with the church. And the church staff should be able to manage all online giving with one vendor. This is why Vision2 operates invisibly to givers and is hands-on with the church.
    1. Who can help the church and the giver in the case of issues with a transaction? One scenario every church wants to avoid is needing to stop or reverse a payment and being unable to. Say, for example, that a giver accidentally gives $1,500 rather than the intended $150. Most online giving vendors are powerless to help. Consequently, your giver must dispute the charge with the payment processor, which may have a policy of NO REFUNDS.In traditional payment processing, neither the church nor the online giving vendor can track a gift during processing. However, as both a payment processor and online giving vendor, Vision2 knows exactly where every gift is in its lifecycle. We can immediately halt an accidental gift. Additionally, we match gifts one-to-one and to the penny for reconciliation (vs. comparing them to batch amounts). And we update your sub-ledger and sync bi-directionally with your ChMS. In other words, we automate everything!
  1. Who owns the giving data? A gift into your system may unknowingly subject your givers to a payment processor’s binding agreement. That means the processor owns the giver’s data. In the event the church wishes to change online giving vendors, the data may irretrievable. Or, the church may have to contact every giver for permission to receive information the giver believed all along the church had. Talk about a trust-buster!We remove the middleman (a third-party payment processor not created to serve the church). This allows Vision2 to solve many of the traditional challenges the church has had with online giving and church credit card processing. That includes giving you your data if you choose to switch vendors.

To find out how Vision2 can help you keep more of your gifts, schedule a giving experience audit today.