It’s Hip to Be Square: Accepting Donations From Your Phone


The other day, I received an email from the non-profit where my mom works about the auction items that would be available at their annual special event. Having worked behind the scenes at similar events in the past, one thing came to mind — payment processing. In my experience, the task requires a lot of attention to detail in order to make sure things run smoothly.

This reminded me about a podcast I listened to that mentioned how stores are now able to process payments right from their smart phones using a service called Square. Square provides a free card reader that can be attached to any IOS or Android device (through the headphone jack) to process payments from anywhere. Think about how this flexibility could revolutionize a special event or even the everyday business of a non-profit. Let’s take a look and if it’s the right fit for your organization.

The Pros:

  • Free Card Reader – I mean, free is good for anyone, even better if you work for a non-profit. Not only is the adapter free, but the app associated with it is free as well.
  • Familiar Format – Most people have a smart device of some sort and are used to using apps everyday. This prior knowledge can come in handy when it comes to training people to use Square. Furthermore, this familiarity can expand the pool of people who could use a Square card reader to accept donations.
  • Next Day Direct Deposit – It won’t take long to see those donations show up in the linked bank account. Money is only good, when it’s available, right? Most times after an event, it can take a few days of coordination to get credit card payments, checks and cash in order to take it to the bank. Using Square at least cuts out some of that process.
  • Secure – Square constantly monitors what is happening across it’s network to look for signs of fraud. Also, Square makes sure that all information in encrypted.
  • All Major Cards are Accepted – No need to limit payments only to Visa and Master Card. Amex and Discover are welcome here, too.
  • Data can be Exported – Accurate financial documents are important to the running of any business. Square allows you to have access to that data and you can run your own reports.
  • Allows for Multiple Users – Each device can be linked to one account so that there can be multiple people at an event. Also, if staff or volunteers have a Square reader and their phone with them out in the community while talking about your mission, a donation by a newly inspired donor can be taken right away without any waiting.
  • Receipts – can be emailed to donors or printed on site when using an iPad.
  • No signature needed for payments under $25 – In a day an age where people are donating (albeit in smaller amounts), this feature speeds up the donation process.

The Cons:

  • Not everyone has a smart device – sad, but true. Even in 2012.
  • 2.75% Transaction Fee – if a $100 donation is collected, your organization will only receive $97.25 after Square collects it’s fee. Granted, you are still receiving most of the money. The fee is collected per transaction and is the same no matter which card is used to process the transaction.
  • Customer/Donor information is not saved – while this is for the privacy of the customer, most non-profits see this information as essential for their donor database records. One suggestion to overcome this is to give each person a unique number that is attached to their name and contact information. Each transaction made with Square can be edited before it is processed so that this number can be attached.
  • No Offline Payments – If your event is somewhere with no cell phone data coverage or wifi available, you will have move to your Plan B option because payments cannot be collected and uploaded later.
  • One Time Payments Only – if you had a donor that wanted to donate $10 a month, this could not be accomplished with Square.

I must admit . . . I am in favor of using Square for the collection of donations (besides, it’s hip to be square) . . . but in the interest of full disclosure, I should admit that I have never used the system myself nor do I have any affiliation with Square. Truth be told, I just wanted to share the system with you because I’ve seen other non-profits struggle with credit card processing (which is never a pretty sight especially at an event with donors rushing to checkout and get home) and I thought this might work for you.

Incorporating technology can make the donation experience easier and more streamlined for the donor. After all, if the donation process is easy and enjoyable, I suspect donors will be more likely will donate again! Right?

Is Square a solution you might be interested in? What has your organization done to streamline its onsite payment procedures?  Please share your thoughts using the comment section below!

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About DonorDreams

Erik got his start working in the non-profit field immediately upon graduation with his masters degree in 1994. His non-profit management and fundraising experience numbers nearly 20 years. His teachable point of view around resource development is influenced by the work of Penelope Burk and those professionals subscribing to a "donor centered" paradigm. Donors have dreams and it is our responsibility to be dream-makers because donors are not ATMs.

Posted on January 23, 2012, in Fundraising, Mondays with Marissa, nonprofit, resource development, technology and tagged , , , , , , , . Bookmark the permalink. 16 Comments.

  1. As a budding new nonprofit, we use Square and love it! The idea that $0 monthly fees and the transaction fees are lower than any processor we have ever researched. So less admin fees = more $ into our programs.

    Also, you don’t have to have a smart phone. You can use an ipod touch and ipad with wifi. In fact the ipad functions as a register of which you can enter items with pricing and photo descriptions if you were at an auction per se. The app is easy to use and integrate for on the go donations or purchases.

    • Thanks for the testimonial, Billy. I am thrilled that your new NFP is up and running.

      The more I reflect on Marissa’s post today, the more I envision auction volunteers roaming the perimeter of the room with their Square and checking people out “on the spot”.

      However, I hope someone who uses a donor database or CRM will check-in and let us know how they integrate the Square with their database procedures. I wonder how much double entry happens and how they work around that?

      Thanks again, Billy!

      ~Erik

      • We still have them fill out a pledge card (or fill one out for them) so that the information is still collected. We cannot afford a donor software yet, but excel works well to collect donor information.

        I am happy to see this out there though. I don’t think a lot of nonprofits know or understand Square. So great work!

  2. Thanks for sharing, Billy! It’s great to see how Square is being used in the field!

  3. If the agency is providing the smart phones, then by all means. However, you might be asking an employee to use their own smart phone for “company business” and you are right – not everyone has a smart phone nor do they even have a cell phone provided by the agency. It can make things faster at an event, however, you do need to capture the donor information.

    • Thanks, Leslie! Your comment just got me thinking and wondering . . . and aren’t those the best kind of comments?

      If the “Square” captures personal credit card info, how comfortable would donors be with letting that info pass through a NFP staff person’s personal smartphone? While I presume that the phone just serves as a portal, I am not sure if anything is retained on the phone. If it is, then any NFP would need to use the agency’s phones and then have policies and procedures in place for wipe info off those phones. Right?

      Thanks for kicking my brain into gear this morning and thanks for reading and commenting. We hope to see more of you around here.

      ~Erik

      • Thanks Lesile and Erik, for bringing up this important point about security. I just thought that I’d chime in with just one thing. I looked it up and Square prohibits the storage of credit card information on client devices and encrypts any information that may be stored on their servers according to industry standards. Also, I don’t know how much is actually stored, but seeing as reoccurring payments cannot be set up via Square, I would have to guess that after the transaction is processed not much is saved. In today’s day and age, one cannot be too careful about these things.

      • Great info. Thanks Marissa!

  4. Brand new update: It looks like Obama 2012 is using Square to accept donations on the campaign trail!

    Read more here:
    http://techcrunch.com/2012/01/30/the-obama-campaign-is-now-using-mobile-payments-device-square-for-fundraising/

  5. Hi, I’m considering using Square for a fundraising event for my NFP, and was wondering in what instance you’d have to “key in” the information? Their FAQ site says: “If you type in the card information manually, our fee is 3.5% + 15¢” vs. their stated 2.75% if you swipe. Anybody here used Square and found they had to manually type in the account info? Or any ideas as to why the additional charge?

    Thanks! Erin

    • Hi Erin,
      I haven’t used Square in the field, but I believe the reason for the extra charge is due to the fact that Square really wants you to use their card reader. It is not only for ease of use, but also because for marketing reasons. If a customer sees the reader being used, a conversation might be brought up about Square and a new Square user might be born. I can’t seem to find any information stating any other reason for the additional charges. The good news is that the card readers are free. They can be shipped to you from Square or purchased at Best Buy for $10, but then Square will refund you the money.

      I hope this helps! If you have any further questions or comments please don’t hesitate to leave them here. Also, if you do end up using Square we’d love to hear how it worked for you. Please let us know how it goes. Best of luck and thanks so much for reading!

      ~ Marissa

      • Marissa,

        I know this is an old post, but wanted to chime in anyway. I believe the reason Square charges a higher rate for manually processed cards is because there is more liablity involved and more potential for fraud. If you are swiping the card, then the cardholder should be standing in front of you. As a merchant that processes cards through a POS system as well, we have to specify if our transactions are considered “card present” or not. If our transactions are processed via phone (manually entered) or via online, then we are charged a higher discount rate.

        Melanie

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