Key Terms That You Need To Know In Nonprofit Payment Processing

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Published on September 3rd, 2019

Payment processing is one of the necessities of running a nonprofit organization because they rely heavily on online gifts and donations sent by their donors. Since online donation forms are essential in receiving a donor’s gift nowadays, you need to make sure the payment and personal information of your donors are secure.

To better understand how nonprofit payment processing companies work, you need to first learn the terms used in the negotiation.

What Are The Terms That You Need To Know?

There are a lot of things that you need to know and understand when you are looking for the best nonprofit payment processing company. The first on the list should be the terms used in the field. By doing this, you will have a clear idea of what to ask for your payment processor.

Here are some of the key terms that every nonprofit organization member should understand.

1. Merchant Account

 Merchant Account

This type of account is set up between a nonprofit organization and its bank. This account will serve as a bridge that allows them to accept payments made by their donors online. Whether they are a credit card or AHC debit payment, this account holds them all. It’s like a holding area for all donation transactions made online.

Your organization might need to set up its merchant account (which is better than having a shared aggregator account to work on.) That depends on the payment processing company that you will be getting for your organization.

2. Payment Gateway

A payment gateway is one of the most basic methods that payment processors implement in protecting your donors’ payment. The purpose of this method is to prevent fraudulent practices.

It secures the credit or debit card information of the donor throughout the online donation process for your organization.

3. Aggregated Payment Processor

Merchant Account12

An aggregator or an aggregated payment processor manages several processes and accounts and multiple transactions and donations by using a single merchant account and payment gateway.

This kind of payment processing company handles all their clients’ operations and use the same merchant account. Some of the most common examples are Stripe and PayPal.

4. AHC Debit Processing

The automatic clearing house (AHC) direct debit method is one of the ways on how your donors can donate to your organization. Your organization can quickly receive online donations made through this.

Your donors can make this transaction by using the account and routing numbers of your donors’ check, which are found at the bottom of the examination itself. AHC debit processing is the easiest method to use when your donor wants a recurring donation debited on their bank account.


Nonprofit organizations need to be well-versed in the terms used in the payment processing field. By knowing all these key terms and some that were not listed in this article, you will know what options are available for you.

You can also tailor-fit all the solutions to all your organization’s needs. Don’t be fooled by cheap payment processing options. After all, you’ll surely get what you pay for.