Modern payments and charities: a changing world

Source: Finance Derivative

By Shaf Mansour, senior product manager at the Access Group’s Not For Profit division.

The world around us is changing, with technology evolving the way people spend their money. As a sector that has been characterised as slow to change, charities are now having to adapt and offer new ways for people to donate. Whether it is through contactless card payments, Direct Debits, or online payments on a fundraising website, there is more to consider when it comes to payments than ever before.

The adoption of digital payments, such as online card donations and mobile payments, is growing within charities. In part this has been driven by the adoption of digital wallets. The most recent report from UK Finance highlights the continuing drop in popularity for paying with cash which now makes up only 15% of payments, a figure which has dropped 15% a year since 2017.

The rise of online and contactless payments, as well as digital wallets, has led to the change. While retail and ecommerce businesses have spearheaded this shift, consumers increasingly expect flexibility and choice when they make any payment so charities need to take note.

Squeezed household budgets mean that the finances of many donors are tight but, at the same time, charities have never needed their donations more to cover rising costs and increased demand for their services. Therefore, it is important for charities to offer their supporters flexibility in all aspects of contributing, including the method and frequency. Doing so will help to maximise income when people feel able to contribute.

Digital payments are no longer a ‘nice to have’ but an increasingly essential part of operations.

Why charities need to adapt

As the number of people carrying cash dwindles, fewer people are dropping coins and notes into fundraising buckets as they wander through town and city centres – which was previously a cornerstone of collecting donations. This isn’t to say that traditional methods of fundraising no longer hold any merit, but if charities want to make the most of their efforts, they should consider updating and modernising their tactics.

In-person fundraising efforts all have to be adapted. Instead of sending volunteers or paid fundraisers out into communities with collection tins, charities can now use portable card machines to collect contactless payments from anywhere, opening the door to a whole new group of one-off supporters – or even starting someone on their long-term donor journey.

Charities can even go one step further away from the physical buckets. By using a QR code that links through to a donation page, charities that don’t have the infrastructure to use a card machine can still benefit from convenient, fast digital payments. Printed QR codes can even be displayed in shop windows and easily shared by members of the public who can take a picture while walking by.

While some charities may have had reservations about moving their payments online, modern charity management and payment systems have security and compliance built in at every stage as standard.

What can charities do?

Digital payments offer your supporters a more convenient and secure way to pay than donating by cash or a cheque in the post, and importantly they can be automated through Direct Debits to guarantee a regular donation coming in.

Every supporter will have their own financial rhythm, which they will have to work their donations around. The ability to set up a bespoke and flexible Direct Debit means donors can do exactly that. Similarly, if supporters need to cut back on their expenses at any point, a modern payment system means they are able to pause recurring payments for a certain period of time. Doing so gives them some time to improve their own financial situations before picking the contributions back up again, if they are able to, without having to refill signup forms.

Compared to cancelling their contributions entirely and never returning, or going through the signup process again later, pausing donations helps to retain customers in the long-term and saves invaluable time for charity supporters and staff.

It can take a long time and a significant investment to establish an engaged, frequent donor – but for those who are forced to make the hard decision to put a hold on their contributions, donation pausing will help reduce churn. In turn, flexible functionality gives donors more control over their own finances, as well as a peace of mind that comes with that.

Updating fundraising

Fundraising possibilities online are almost endless, due to this digital payments become even more important. Online, website embedded payments make the journey from seeing an advert, article, or social media post to completing a donation seamless.

Customers reaching their chosen charity’s website hoping to donate won’t have to be redirected elsewhere to enter payment details – which can be concerning for those worried about their online security, and more time consuming than it needs to be. Instead, they can simply enter their details on one page and feel confident that their payment and data is secure.

Using the information from integrated online payments feeding into the customer relationship management system (CRM), automatic personalised communications can be sent out to give thanks for donations of certain amounts, share good news and impact, or pick the relationship back up if it has been some time since a donation. These automations take some of the strain off donor management teams, so they can work on improving existing relationships or completing new outreach to potential donors instead.

With modern payment solutions charities gain complete oversight of their income, and integration to their finance department makes keeping an eye on finances simple – reducing the risk of human error in translating information between departments. More accurate insight into the charity will lead to better, more accurate decision making – and armed with better information, staff have more time to focus on improving campaigns.

While digital upgrades may make sense to more tech-savvy supporters, a large proportion of donors may not have the skills or equipment to use them. It’s vital for charities to consider all of their supporters and choose a system that will support and improve both new and traditional methods of donating.

Those without a laptop or mobile phone who still want the convenience of not filling out lots of paperwork may prefer to set up or manage their donations over the phone. A charity CRM with the ability to accept donations over the phone will allow fundraisers to reach out to donors, and take one off payments or manually set up recurring direct debits.

As all updates or new donations are easily entered into the database, where they remain safely stored, contact centre staff have more time to spend helping more digitally-excluded supporters, instead of updating records. One centralised and secure database for donor information ensures that GDPR requirements are adhered to – as sensitive data is not moved around or accessed unless absolutely necessary.

The landscape of payments may be rapidly changing for the charity sector, but in turn it’s bringing a whole new world of possibilities in fundraising. Donations both big and small are at the fingertips of potential and existing donors, and it has never been easier to fit them around a donor’s personal financial circumstances.

There are many who argue that a truly cashless society may be a long way away, but it is undeniable that the preference of online and digital payments will open the door to a new wave of convenient, secure, and reliable donations for charities.