Donations and Storing Card or Account InfoBy Eric Bryant,
Some customers have asked about how to store their donors’ credit card info for future checkouts. They want to do this so that the donor does not have to re-enter credit or debit card info over again, making future checkouts faster and friction-less. We want to explain how this works and the security features different payment processors may have around this.
Since the majority of our customers utilize PayPal to process donations, let’s talk about how PayPal does it. First, you need to realize that there are two different types of PayPal donations. Both operate differently in the PayPal processing system.
One-Time PayPal Donations
If the donor is giving a one-time donation, PayPal gives her the option to log in and donate with her PayPal balance (or other linked payment method) or skip log in and pay directly with a debit/credit card. In other words, if the donor chooses to skip log in, and if it is a one-time payment, PayPal does not require the donor to create an account. Though this is a faster checkout experience, each time the donor comes back to donate, she will have to enter her card details.
If the donor does not wish to keep re-entering her card details, she will need to create a PayPal account and link an email address, password, and debit or credit card.
The donor may also link a bank account, but this will take a few business days to confirm and activate. In order to link a bank account, PayPal will ask for the donor’s bank account and routing numbers. Then, in a day or two, PayPal will send two small payments to the donor and ask her to confirm the amounts. Once the donor confirms the amounts, her bank account will be linked in PayPal, and she can then donate funds directly from her bank account through electronic funds transfer (EFT).
If the donor does not wish to link a bank account, she can just link a credit/debit card. Once the card details are entered in, they are stored in the donor’s PayPal account. So, whenever she logs into PayPal to make a donation, she will have the option of paying using the linked card.
What’s important is that, in either case, whether linking a card or a bank account, if the donor does not want to re-enter details more than once, she will have to create a PayPal account to store the account details to use in subsequent donations.
Recurring PayPal Donations
Unlike one-time payments, recurring donations require the donor to create an account; for pretty much all processors, there is no way to set up a recurring payment without creating an account. The reason is that no payment processor can “remember” the card or account details of a donor, unless those details are linked to log in credentials.
Why not? Have you ever paid for a product on a site or app, but did not log in? You made your purchase as a guest. The site asked you, “Would you like us to remember your information for future purchases?” but you said no. Basically, what you’re telling the site is, “Don’t remember that it’s me who owns this credit/debit card the next time I come to make a purchase.” In this case, the site has no way to know that the card details you entered actually belong to you and not to the next random person who comes to the site.
If you said, “Yes, store my information for future purchases,” the site will require you to create an account and sign in. This is to ensure that you are the correct person authorized to make purchases with the corresponding card or account.
Recurring payments, by their very nature, must operate this way. The payment processor cannot charge your account or card in successive months unless it can store your account and card details. But in order for the processor to store your details, it has to be able to match your identity with those account/card details. It does this through your log in credentials — what is known as “authentication.”
In short, payment processors require donors to create an account — to authenticate the donor — in order to store card/account details and process recurring donations.
Enhanced Recurring Billing and Payflow Pro
PayPal does offer two business paid services that allow nonprofits to accept recurring donations without requiring donors to create PayPal accounts: Enhanced Recurring Billing and and Payflow Pro. Enhanced Recurring Billing is $19.95/mo and is an add-on feature that businesses and nonprofits can purchase. Payflow Pro is $40/mo and allows nonprofits to manually set up recurring donations on the fly for donors without requiring them to create an account.
Unfortunately, with PayPal’s free business/nonprofit account, recurring donations require donor account creation.
PayPal or GMG?
With our service, you may use PayPal as a payment processor. You may also use our company’s payment processor (Moonclerk, which is built on Stripe). Alternatively, you may use any other payment processor you choose, so long as it has a mobile web checkout option.
If you use PayPal and wish to allow your donors to store their card or account info, then as discussed they will need to create a PayPal account. They only need to do this once. Whenever the donor visits your PayPal checkout for subsequent donations, they can just log into PayPal, select their desired payment option, and check out — all without having to re-enter any account or card details (because the info is already stored).
By contrast, if you decide to use us as a payment processor, we require account creation and storage of credit card details on the first donation. This enables the donors to manage their card or account details, update them when needed, change card details, etc.
However, the limitation with using us is that, on subsequent visits, we do not offer a log in method to donate without re-entering your card details. If you use us, your donors will have to re-enter account/card details every time they wish to donate.
(The exception to this is if the donor chooses to give a recurring donation. Then, he only has to enter his account or card details once. Our system will store the card/account info on file and will charge the donor the following period, automatically.)