Low cost online payment processing solution for public schools?

Question

Via a website, my local school Parent Teacher Association would like to enable parents to sign-up for various activities and pay for these activities via credit card. In my initial research, there seems to be a pretty high fee (~2%) per transaction. Since the PTA is a non-profit, are there any low cost option or solutions that provide discounts to non-profits like public schools? The school is in a small suburb in NJ.

Answer 1

unfortunately you will not find many solutions out there that charge less than 2%. You can try mailing Authorize.Net and Paypal to see if they have anything special for NonProfit organizations.

Answer 2

Unlikely: the lion's share of those fees come from the credit card companies themselves.

DonorPerfect has a whitepaper about this topic.

Answer 3

I know that Google Checkout has some options for non-profits.

Edit: You need to be a member of Google Grants for free transaction processing. Not 100% sure who is eligble for that =/

Answer 4

Have a look at Protx, it charges by number of transactions rather than percentage of the transaction.

http://www.protx.com/

They also have a bespoke option that you could enquire about, they might offer something tailored to a non-profit organisation.

Answer 5

Depending on the volume of transactions, the PTA may just be able to sign up for their own merchant account. This will work out best if they are registered as a non-profit. If the PTA is not registered as a non-profit organization, there is also the possibility that the school (or the local city) can sign up for an account.

You should note that merchant account providers vary a lot with respect to rates set for accounts. If most of the transactions are not performed in-person, your PTA could be looking at charges starting at 2.19% and proceeding much higher than that. Charges made face-to-face with a swiped reader usually start at 1.69% for most cards. Overall, this can make fund-raising and collections an expensive effort for a PTA.

Regardless of non-profit status, the best account type that can be requested is known as an 'Interchange-Plus' account. This is an account where the going rate per transaction is the rate set by the Processor and Bank, plus a tiny surcharge by the Merchant Account provider. You may be able to negotiate this down to as little as +0.05% and a penny over base rates. Smaller ISOs, away from Paypal, Google, and Authorize.Net, are more likely to offer this type of account. A search on Google for 'Merchant Account' can give you a list of parties to contact.

Beware of arrangements involving free monthly usage and watch out for account termination charges. These are frequent places where people get scammed, and could cause undesirable expenses outside of normal processing activity for the PTA.

Finally, your PTA should really reconsider whether this is necessary. As a metric, they should figure out how much money they stand to lose at 2.75% + $.25 per payment. In addition, expect a montly fee starting around $9.99 (and proceeding lower). The 2.75% covers an average case for rewards cards and american express cards. Year-to-year, this may add up to be a lot of money lost by the PTA, that could be made up by a volunteer working by hand, handling checks and cash.