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Direct Debit Capabilities Can Greatly Benefit Nonprofits

The general public now has the power to remain in touch on a regular basis thanks to advents in digital technology. Real-time interaction has become a cultural norm as portable device usage continues to grow in everyday life.

To meet fluid consumer demands, organizations are beginning to integrate real-time solutions into their success models. The idea of direct debit payments isn't new to the payment processing industry, but the modes in which individuals donate money is growing to keep up with evolving technologies. Specifically, automated clearing house payments have become popular due to their ease in use and streamlined transaction capabilities.

ACH payments have increased efficiency and timeliness of government and organizational transactions, and on the consumer end, direct debit payments are an easy and convenient way for patrons to buy on-the-go. The growth in acceptance of e-payments in recent years has been staggering, and ACH payments accounted for $9.8 trillion in total revenue in the fourth quarter of 2013 in the U.S. These types of purchases now account for more than half of all noncash payments, including personal checks and credit cards.

Nonprofits Reap Benefits of ACH Payments

A likely driver in the growing acceptance of certified payment processing may parallel the increase in digital technology usage, but another reason for its recent success is the amount of money that it saves for the organizations who utilize its capabilities. Transactions are simplified for the nonprofit that accepts the online donation, and they're not having to pay to raise money. Instead of taking a percentage like most other payment processors, ACH vendors typically charge a flat fee for all transactions. As a result, nonprofits were found to have saved up to 85 percent on maintenance costs alone. The number of rejected transactions was also reported to have decreased since donors are much more familiar with their financial standing at their banks as opposed to a personal credit card.

Nonprofit payment processing will likely undergo further changes in the near future as well given the recent historical trends. Consumers are beginning to expect faster and more effective communication capabilities, so payment processing is likely to follow suit. A recent ACI worldwide survey found that 70 percent of respondents in the ACH market felt that real-time transactions will become a reality within the next two years. Another 92 percent believed the same thing would happen in at least five years.

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