Cash has lost much of its dominance as the primary payment channel in the U.S., which is good news for organizations looking to increase online donations. Credit and debit payments are now more popular than cash, highlighting the growing importance of online donations for nonprofits.
Credit and debit transactions now account for 42 percent of all purchases, while cash is at 40 percent, according to statistics from Business Insider. While these numbers may seem close, the value of cash transactions is typically lower than credit or debit purchases. Consumers are increasingly turning to plastic for larger-ticket transactions. If you want to increase the size of an average donation to your organization, online donations should be a primary focus. While checks are still used for some high-value purchases, they only account for 7 percent of transactions, and this number will continue to shrink with the emergence of new online donation and payment methods.
What the increase in credit and debit transactions means for the future of online donations on mobile devices
A great deal of the growth in online donations has come from mobile devices. Smartphones have taught consumers that they can access any information wherever they go, and this logic is applied to shopping. What’s the implication for the nonprofit community? If charitable individuals are surfing the web and come across nonprofit organizations on the go, they can become a donor almost instantly.
Organizations will soon be able to capitalize on the power of mobile giving even more with the new Apple Pay feature in iOS 8. It’s a mobile wallet that stores users’ payment information, allowing them to make a purchase/donation with a couple taps on the screen (see below). The credit/debit card card and contact information auto-fills which makes the process even more convenient.
Although contactless payments aren’t a brand new concept, Apple Pay will make them more accessible to a larger group of people. Citing data from Citi Investment Research, Newsfactor Business Report stated that mobile payments were $1 billion in 2013, but this figure could grow to $58.4 billion by 2017 with Apple’s latest announcement.
What online mobile fundraising means for fundraisers
While the reality of online donations probably won’t change overnight, organizations should pay attention to major industry developments like Apple Pay. Especially as consumers become more aware of these capabilities from devices they already own, there will be a growing acceptance of mobile payment technology.
However, this transition may not be immediate. Currently, 220,000 retail locations are preparing to accept Apple Pay. While this seems like a large number, it only amounts to 5.5 percent of the total locations around the U.S., Newsfactor reported, citing data from the National Retail Federation. It may take some time for others to recognize the validity of mobile payments.
No matter your level of preparedness to accept mobile donations, people are spending more time interacting with their smartphones. This highlights the growing importance of mobile technology as the best medium to reach current and potential donors. It is critical that all organizations take steps to ensure that donation pages are mobile friendly and compatible with IOS and Android auto pay functionality.
By Sean MacNeill, MobileCause CEO