Take Credit Cards On-Site

Does your organization need or want to be able to take credit cards?  Maybe for the fundraiser auction or the pancake breakfast tickets…?  You used to have to have a merchant account to do this, and the costs were pretty prohibitive, with the fees for just having the account (not including per transaction fees) being over $45 each month!

PayPal for charging credit cards is a great solution for your website or for sending an invoice to be paid later, and there are lots of ways to deploy it, but what if you need to make the transaction away from a computer?  Some companies have offered the ability to do mobile transactions, but only if you bought their $150 card readers…

square readerBut now a new company is offering a great solution for non-profits and small businesses–if you have a smart phone (or at least access to one): Square.  Open a free account with Square like you would open a PayPal account.  They send you a card reader (see the white thing in the photo?) for free that will plug into the audio jack of an iPhone or Android phone.  That’s right, a free card reader!  And there are no set-up fees, no monthly fees, just a per transaction fee of 2.75% + 15¢– very comparable to PayPal, and much better than merchant accounts.  (Transactions without the card present, where you’re entering the card number by hand are a little higher, because they are federally regulated differently).

When you are ready for a transaction, it’s quick too!  Launch the app, add the amount & an optional note for what’s being bought, swipe the card, it authorizes, the payor signs with a finger on your screen, and can add their email address to get a reciept.  That’s it!

Like PayPal, you link your bank account to your Square account to transfer the funds.  I haven’t experienced it yet, but the transfers are supposed to be overnight, not 3-4 days.

I have an account for my business to take cards at the workshops I give, but I’m already thinking of a number of situations for churches and non-profits where this would offer those folks who don’t carry cash a way to contribute– payment for classes or training materials, donations to the mission trip, contributions to support a project… if you think of more ideas, put them in the comments.  I’d love to hear from you!



2 Responses to Take Credit Cards On-Site

  • Nice article Bet! You say the Square is better than having a merchant account. Can you elaborate on that thought for me? If you are paying $45/mo you are simply getting ripped off!

    And a note for you readers out there, you are literally “swiping” the card with the Square but 2.79% is not a swiped rate. It is actually on the high end of the spectrum of a real swiped rate with a merchant account.

    I don’t mean to be negative. I just want people to have the right information. The Square is a great product for the right people.. but you will ultimately be paying more than having your own merchant account. If you are going to be processing a significant amount of volume, I would highly suggest having a merchant account. Now finding an honest and straightforward merchant service provider is another story…


  • Bet Hannon says:

    @Mike: You are right, if you are doing a lot of transactions, you are better off with a merchant account.

    But I work almost exclusively with small non-profits that are still mostly check-based, and only have occasional needs for credit card transactions. It just doesn’t make any sense for them to pay $40+ per month all year long to be able to take credit cards for 20 transactions twice a year at their fundraisers.

    For them, the Square or PayPal pay-per-transaction-with-no-other-fees usually works out to cost less overall. BUT everyone should do the math and figure out which is more cost effective– and keep checking occasionally to see if your solution is still the most cost effective.

    Thanks for weighing in Mike!

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