CiviCRM Community Forums (archive)

Just wanted to post a quick note here on my experience researching payment processing options over the past few years.
The main takeaway is, there is a significant cost advantage in using a true credit card merchant account + Authorize.net (or other gateway) vs. fixed-rate middlemen like PayPal, Stripe, Square, etc.  Especially if you are a 501(c)3.

Many merchant account providers are now offering "interchange plus" pricing, where they pass through their direct costs from Visa & MasterCard (a.k.a. interchange rates) plus a very small markup.  This offers two main cost-saving advantages:

1) Debit/check card transactions process at a much lower rate:  0.05% + 22 cents, as mandated by the Dodd-Frank legislation
2) For regular credit card transactions there are discounted interchange categories for non-profits:  1.35% + 5 cents for Visa, 2.00% + 10 cents for MC

The merchant account provider then adds a very small markup on top of those -- for ours it's 5 cents/transaction plus a flat $25/month.

Our all-in processing cost last year was 1.7%.  Using Stripe's 2.9% + 30 cents pricing model would have cost us almost $10K more -- increasing every year as our organization and transaction volume grows.

We've used three different merchant account providers in our 10 year history, and approval has been relatively easy every time, even when we were a brand-new organization.  All of the accounts have been through ISOs (independent sales organization), who are essentially independent agents for the big merchant banks (also called acquirers).  In every case, they've been able to deposit funds straight to our main bank account, which is with an entirely different bank.

None of our merchant providers have been particularly focused on not-for-profit orgs.  As long as they properly code your account for MCC 8398 (Charity & Social Services), you should get the discounted processing rate.

Our experience is all US-centric of course.  Things may be different in other countries.

I do like the web site CardFellow.com.  You can enter some basic details about your org's transaction volume & etc., and you get competing bids from various ISOs.