Why Church Giving Providers Charge a Transaction Fee
Learn how churches get immense value from using a digital giving solution.
April 17, 2020
Hey, church leader. Frank here with Tithe.ly.
I wanted to take a few minutes to talk a little bit about why church giving providers like us at Tithe.ly, who provide mobile giving, text giving, website giving, and administrative gift entry tools charge a fee on transaction.
If you go to our website, you're going to see a per transaction fee, so every time someone gives it's 2.9% plus 30 cents per transaction for credit and debit and it's 1% plus 30 cents a transaction for ACH. There's a lot more going on with technology as compared to sending a simple church donation letter.
Those are common. If you were to go to any other church giving provider, you're going to see fees, not too dissimilar, not too far off from those. If you go to church management providers, if they do giving, you're going to see fees. If you go anywhere outside of the church space and you go to some sort of payment processing entity or software provider, there's going to be fees.
I think there's two main things to understand here about those fees. Number one is there's actually a hard costs that us church giving providers are paying. So Visa, MasterCard, Amex, Discover, they all have fees that they're charging, the card networks and the banks and other entities that exist in that chain of processing a payment all have fees associated with it. So there's some hard costs that come into play automatically. Even if you didn't have the tools on top of all of those elements, the card brands and things like that, those elements would be charging fees.
The second part of the equation is you need software that's built on top of the payment processing engine that sits on top of the networks and works with the card brands and all those kinds of things. So there's time, energy, people and resources put into building the software, right, to get a nice mobile giving app, to get a great online a website giving experience, to get text giving, to get all the reporting, the deposit reporting, the tax receipting, just the individual transaction reporting, to get all the tools that come as part of a giving solution or a suite of products. There's people building those things, right? So there's hard costs in terms of the employees and the other software we're using and the staff and all of that stuff that's put into place, right?
There are fees from the networks and card brands. There are costs in our business to build the software. So oftentimes what you'll see is a company like ours, bundling all those fees into the transaction, which is a model that essentially lets you get in at no risk, there's no upfront fees, there's no monthly fees, there's no fees that come at the end of the month for other things like PCI security or deposit reports or anything like that. You just pay the per transaction fee. That's a pay as you go model, right? So if nobody gives you pay nothing, right? If somebody gives $100 you're going to pay a couple of bucks for that. And it scales up with you as you grow. So hopefully that gives you a little bit of insight into like why we charge fees so that we can both pay our costs and we can keep the lights on as a business and make a little bit of revenue. So that we can have a sustainable company that's serving churches and innovating in the church space for a long time to come.
Read the full blog of this episode here: https://get.tithe.ly/blog/why-church-giving-fees
Today on Modern Church Leader, Tithe.ly COO Frank Barry explains how churches get immense value from using a digital giving solution.
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Tithe.ly is the global leader in digital giving, church engagement, and church management software. Tithe.ly serves over 13,000 churches in 50 countries, and is trusted by churches and ministries such as Hillsong, North Coast Church, Rock Church, and Ravi Zacharias International Ministries.
Frank Barry, a former youth pastor of five years, is a founding team member and COO at Tithe.ly. Prior to being at Tithe.ly, Frank spent nearly 15 years helping churches, charities, and nonprofit organizations leverage technology to advance their mission. When Frank's not helping churches use technology to advance the kingdom of God, he’s spending time with his triplet boys and their superhero mom.