What is the best online payment solution for NFPs?

If you run a non-profit organisation such as a charity, sports club, or something similar, we understand cash flow is probably a constant concern.

More and more Kiwis are choosing to buy and pay for their goods online. NFPs could learn a lot from this trend – Kiwis are doing everything online, and they want to donate to causes online too (just look at the rise of crowdfunding websites). Should NFPs be encouraging online donations through the same payment services as retailers?

Definitely – and here are the platforms to use.

Finding the best payment gateway for an NFP

What is a payment gateway?

Every website that wants to be able to accommodate online payments must have a payment gateway set up.

A payment gateway is a virtual system that helps facilitate the transaction between a payee and their customer. In the case of an NFP, charity or other community-run organisation, the customer will of course be donors, fee-paying members, customers of merchandise and branded items, or similar interested parties.

Payment gateways also verify payments. For example, when someone uses a credit card to pay online, the gateway verifies that the card exists and its details are accurate, then it accepts or declines the payment on behalf of the organisation.

To set up a payment gateway, your organisation may need a merchant bank account. To learn more, we recommend skimming through our definitive guide to payment gateways.

What should an NFP look for in a payment gateway?

  • Low fees: Payment gateways almost always come with fees, but you can usually shop around to reduce those. Expect to pay per-transaction fees and sometimes flat rates such as account or admin fees. But be sure to ask about discounts for NFPs, as some vendors offer lower rates for non-profits.
  • Simplicity: You need your people spending more time running the organisation than attempting to set up, integrate or use a new piece of software. So, simplicity is a must – especially if your organisation is too small to have dedicated IT or accounting staff.
  • Support: There will always be a time when you’re not sure about something. Knowing a vendor is there to answer your questions quickly and effectively is therefore a critical need. Local support is even better.Those are the core three factors. If you get all three in one system, chances are it will suit your organisation sufficiently. That said, if you are growing or expect to grow much larger, you may also look for two additional factors:
  • NFP specificity: Some payment systems are built specifically with NFPs in mind. This means that some of their features are better-built for a non-profit situation, and their support team has more knowledge of the needs of an NFP.
  • Extra features: As your organisation grows you will want to rely less on ad-hoc systems and more on purpose-built features that can scale. So a payment gateway with extra features, such as dedicated donations pages, merchant or e-commerce facilities, more integrations, that sort of thing, may be more suitable.

The top payment gateways in NZ

Currently, the top five payment gateways in New Zealand are:

  1. Flo2Cash
  2. Paystation
  3. Windcave
  4. Bambora
  5. Stripe

To learn more about each, check out our article “Top 5 New Zealand Payment Gateways”. We’ve covered basic features and fees, and provided links to help you further research each vendor.

In addition, this article covers 14 critical questions to ask before choosing a payment gateway.

Finding the right online payment options for an NFP

OK so we’ve talked about payment gateways, but what about the payments themselves?

These days there are a lot of ways to make payments online, far beyond the old days of credit and debit cards. So what should you be looking to offer your donors and customers?

How to choose the right payment options

  1. Offer choice
    These days most people want a choice – we can’t sit here and recommend any one particular online payment option, even if it would benefit us (an online payment option) to do so. The honest answer is that most Kiwis want to pick the one they most enjoy.Let’s put that in numbers. 19% of Millennials have never owned a credit card, and nor have 49% of Gen Zers (Laybuy). On top of that, over 30% of Kiwis have used a platform like POLi recently, alongside 39% using apps like PayPal, Google Pay or AliPay (Payments NZ Consumer Study 2020).So, try to look into a few different options that you can implement easily, so your donors can pick their preference.
  1. Look for simplicity
    As we mentioned above, you should spend your time running your organisation, not faffing around with IT systems. So, ease of integration is going to be important (which means support is important here too).Most payment gateways either have certain payment options built in, or will easily integrate with certain options. We would recommend that you start there.
  1. Look for fees you can manage
    Like the gateways themselves, payment providers also charge fees. Again per-transaction fees are the most common, but there are sometimes also fees involved with account admin, currency conversion, and so on.
  1. Look for ease of use for customers and donors
    We’ve talked about simplicity a few times but these options can’t just be simple for you – they have to be simple for your customers or donors, too. So how can you make it easier for your people to donate or pay fees? We’ve got some advice here too:

The most common payment options in New Zealand

In New Zealand, according to the Payments NZ study we cited earlier, the most common ways Kiwis pay for things online are:

  1. Debit card
  2. Credit card
  3. Payment apps (i.e. Google Pay, PayPal)
  4. Direct online payment solutions (i.e. POLi)
  5. Inside a company’s own app

To summarise what each of those actually do…

  1. Debit/credit cards: We all know what these are, and it shows in their popularity. That said, for credit cards in particular they don’t suit everyone equally.
  2. Payment apps: Payment apps take a few forms. Google or Apple Pay, for example, are digital wallets. Users load their card details into these apps and pay for things online via the app, which then takes the money from their card. PayPal goes even further by not just acting as a wallet, but its own little bank account – users can store money in the app, and pay using their PayPal balance.
  3. Direct online payments: Platforms like POLi let users pay for things directly with their online banking account. They log into their bank as they normally would, and all reference information and dollar figures are inputted automatically. The transaction is then instant and secure, and requires no additional accounts or apps like the other options in this list.
  4. Company-owned apps: Some brands develop their own apps and build payment systems into them. Uber, AT Hop and Vodafone are examples. Users will generally have to add credit/debit card details or top up a balance in order to pay.

How do I know which options are right for my people?

Quite simply, you’ll need to either guess – or ask!

Talking to on-the-ground experts may yield some interesting advice on what your donors and customers enjoy. You can also ask donors directly through workshops, focus groups and donor surveys.

To learn more about some of the subjects we’ve just introduced, try these articles as well: