When funds are donated to a non-profit, there’s a cost attached to making the payment. We call this cost, the cost of digital giving.
You can read a more thorough explainer on what we mean by the cost of digital giving, here. But in the meantime, all you really need to know is this:
Every time a donation is made to a non-profit, a small percentage of that donation is put towards covering the cost of:
a) the transfer (processing fee)
b) the cost of using the fundraising platform (platform fee).
The cost of digital giving operates like this:
The cost of giving is nuanced as whilst it helps to sustain the valuable work of fundraising platforms and services, ultimately, it still means less funds to non-profits.
However, recent innovation in FinTech shows promise of a world where we can get the cost of giving down to zero.
One exciting company taking on this shift is Checkout.com, a payments provider that recently announced the launch of ‘Checkout Giving’. Checkout Giving is an initiative that will see Checkout.com’s processing fees waived for all charitable donations made through their gateway.
Wait, but who are Checkout.com?
Checkout.com are a payments provider that handle the process of getting money between users (people making a payment online) and merchants (the seller). Checkout.com’s payment gateway handles every stage of the payment process, therefore removing the need for the third parties that are ordinarily involved in processing an online payment.
How have Checkout.com revolutionised the payments space?
By handling the entire payments process themselves, Checkout.com have been able to significantly optimise both the cost and speed of processing online payments. (Their technology is a pretty major breakthrough in the payments space, and looks as though it could revolutionise the way payments run).
What does Checkout Giving mean for non-profits?
Checkout Giving could really change the game for non-profits. Removing processing fees on charitable donations means 100% of donations reach the non-profit; enabling good causes around the world to maximise the impact of their fundraising.
The cost of giving when donations are made via Checkout.com's payment gateway:
What does Checkout Giving mean for Checkout.com as a business?
Given that high-purpose brands will double their market value more than 4x faster than low purpose brands and will create much higher levels of total shareholder returns, Checkout Giving is a smart move for Checkout.com as a business.
Though they have little to prove when it comes to technical prowess, Checkout.com's decision to waive their fees for charitable donations has taken them to a new league: setting an entirely new agenda for the payments industry and signifying a critical step towards getting the cost of giving down to zero.
Founder and CEO, Guillaume Pousaz, has made clear that giving back is a key component to his company's roadmap by championing, and now demonstrating, his belief in the "positive difference that can be made when scalable technology and good causes unite".