Are charitable foundations ready for a cashless society?

The future of payment could be in the palms of donors' hands. There's an expanding list of capabilities that people with smartphones and tablets are able to experience on a minute-by-minute basis, which will likely have an impact on the way charitable foundations process payments. A recent Forbes article highlighted the way that people are changing their cash-handling habits. First, more individuals are carrying around a mobile phone - 6 billion people worldwide, in fact.

Mobile habits affect other behavior
Citing research conducted by Visa, Forbes reported that American are twice as likely to be found with a mobile phone than they are to have cash in their pocket. At the same time, mobile payments reached $1 billion in 2013, which is a two-fold increase over the previous year, eMarketer indicated. Because the price for mobile devices precipitously falls every year, people are able to purchase smartphones and tablets with greater ease.

While mobile banking has caught on fairly quickly, other payment habits are changing as well. The financial services technology provider Fiserv recently released a report that found consumers are paying their bills through a mobile device more frequently than in previous years. The study found that between 2012 and 2013, the number of individuals in the U.S. using their smartphone or tablet to complete this type of transaction doubled from 8 million to 16 million. The majority of consumers used the smartphones to complete these payments, with 70 percent indicating convenience was the primary factor, while around-the-clock access and the ability to save time also influenced their choices.

What does it mean for nonprofits?
There are a variety of ways that nonprofit organizations can embrace mobile technology during pledge drives. If a charitable group holds a fundraiser in the community they're working to support, it could consider the role near field communication, or NFC, chips could play in collecting donations. Forbes explained iPhones already contain the technology that makes it easy for people to simply wave their phone over a reader connected by Bluetooth. Like other cashless transactions, their financial information is processed and draws from their accounts.

One of the most important aspects to remember is security. Donors must be assured that their mobile donations will be processed as safely as checks or credit and debit transactions. Working with a certified payment processor can help allay any fears contributors may have when using any kind of new technology.

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