Back in December, I challenged churches to resolve to add an online giving option. I wrote,

Not only is online giving essential in an economy that is becoming cash-less and check-less, the availability of the service also speaks volumes about your church. Churches that refuse to adopt modern financial practices communicate that they are resistant to change. There are aspects of the church that should never and will never change. While our commitment to the core tenants of the Gospel is unchanging, to reach new generations, we need to grow and change on things that aren’t gospel. We seem to be fine with indoor plumbing and air conditioning, and they aren’t in the Bible. It is time to remove another obstacle that gets in the way of true discipleship.

But where do you start?

Step 1 – Understanding Online Giving Concepts

Choosing an online giving platform is dreadfully confusing. There are a lot of moving parts and different providers explain them in a myriad of ways. They also employ drastically different pricing models. This makes it difficult to understand the best platform and plan for your church.

In my next post, I will share information on some of the many different companies you can choose from. For now, let’s start with some definitions. For a clearer understanding to help you make a better decision.

Transaction Cost

This is the real cost of each donation made through the service. It is usually presented in terms of a percentage and a set cost. For example, a transaction cost may be listed at 2.9% + 30¢. That means the cost to you, the church, for each transaction would be 2.9% of the total transaction, plus 30 cents. If someone gives $100 through the platform, the church would be charged $2.90 + 30¢ for a total of $3.20. The amount, from the $100 donation that would be deposited into your bank account would be $100 – $3.20 or $96.80.

Merchant Account

This is a special bank account that allows someone to accept credit cards. Some churches already have these if they take credit cards offline (i.e. through the church office.) Some services work with an existing merchant account. Others offer end-to-end processing, meaning they use their own merchant account for the transaction and then pass the proceeds on to you.

Setup Fee

Some services charge an upfront cost to set up the service for your use.

Monthly Charge

Some services charge a fee every month for their service. Usually, you pay the same fee every month no matter how many contributions you receive. Others charge different amounts depending on the number of transactions. A few services charge no transaction costs because the fees are covered in the monthly fees. Others lower their transaction costs in exchange for the monthly fee. This monthly charge is important to consider and calculate into the transaction costs. This is especially true if you expect a small number of donations. If a service charges $20 a month and you have only four transactions a month, no matter what their transaction fee, you would be paying an additional $5 per transaction.

Text Giving

This is becoming very popular. Text giving allows people to give via text message. Here is how it works: Your church is given a special phone number. The giver sends a text message to that number with the amount they want to give. The first time they do this, they receive a reply with a link to a website. The giver goes to the website, signs up with their information and credit card and confirms their gift. The next time they want to give, they simply text the amount to the number, and they instantly receive confirmation of their gift. This is different from other services that charge the amount to a person’s phone bill. This allows them to link their giving to a debit or credit card.

Recurring Payments

Givers can set an amount and then select how often they would like to give it. It is then automatically deducted each week, month or another timeframe they select.

ACH / eCheck and EFT

Electronic Funds Transfer (or EFT) has been used in churches for a while. It allows people to connect their checking account to their church and have money automatically withdrawn on a specified basis. Automated Clearing House (or ACH) is one method of doing this. If you have ever paid by check online, without using a physical paper check, you have done this. The per-transaction costs of ACH are usually lower than the costs for credit cards.

Kiosks

Kiosks allow people to give electronically from a device in your lobby, office, or other on-site location. Personally, I wonder about the future of these. With such a great percentage of people who carry a mobile device and more with computers at home, these may eventually be obsolete. However, if this is an important feature for your church, make sure your provider can make it happen.

Getting to know these concepts should give you a head start when I write about the next step, choosing a provider.

This post continues my pledge to help churches take some first steps, to live out the resolutions I listed in my post, “Five Communications Resolutions for 2018.” You can read about what inspired the post in “The One Reason Nothing Comes Out of Those New Year’s Resolutions.”