Online Payments: When “High Tech” is actually “High Touch”.

It is hard to believe that my daughter Dani begins college at American University in just 4 months. I am reminded of when I was preparing to go to George Washington University, when I opened my first checking account. I thought it was so cool to have my name and address on a check. Little did I think about the responsibilities of paying for goods and services that went along with that.

ATMs hadn’t been invented yet and not many of my friends had credit cards. Back then, you could go to the Student Center and cash a check for up to $100. Except during exams when for some reason the limit was $50.

College students today don’t use checks. Debit Cards are accepted all over, and with a student bank account, they can go to almost any ATM for the occasion when they need cash. They purchase lots of stuff on line – clothes, books, and music – and make such purchases at home on their computers or literally anywhere with their IPhones or Androids.

This is how Generation Y (born between 1981 and 1992) and Generation Z (born after 1993) conduct the business of their lives.

How synagogues present to these age cohorts through their websites and billing practices is important.  Young people in their 20s and 30s will first check out a synagogue through its website. If there doesn’t seem to be something for them in the programming described on the website or pictures of other people who look like them and are of a similar age, you won’t see them attending services except on the High Holy Days with their parents (A future blog post will be about websites).

Young people will also want to conduct the business of being a member of a synagogue the same way they conduct all their other transactions. Your synagogue’s website should invite on-line payments for dues, contributions, religious school tuition and event fees.  When paying by check is the only method of payment allowed, it is not making their lives easier.

Each year, the percentage of people in North America purchasing books, clothing, music, and so much more online continues to increase. Whether it is for the purposes of airline miles or just convenience, many “Baby Boomers” would also take advantage of this payment option.

Allowing on-line payments should increase office efficiency. What was a 4-5-step process for each check (Opening the envelope, determining the purpose of the check, entering the check in an individual’s membership software record, copying or scanning the check, depositing the check, sending an acknowledgement letter if it is a contribution) becomes a much shorter 2-step process (reviewing all on-line contributions en masse and uploading them to the membership software records).

Several synagogue leaders have expressed to me the concern regarding the costs involved for credit card processing. Over the years, check processing charges for synagogues have been greatly reduced and are not often of much significance.

A number of not-for-profit organizations and synagogues have added a statement to their payment page/form that reads something like this:

“Please consider making an additional contribution of 3% of your payment. This will help Temple ABC cover the bank charges incurred by allowing online credit card payments.”

Charging a processing or user fee may be illegal in some states and violates the agreement with credit card companies (American Express, MasterCard, Visa).  But you can give a discount to congregants who pay by check.

Synagogues have used a number of credit card/online options. You should begin researching this by reaching out to your membership software provider and your bank. Several synagogues and not-for-profit organizations are using PayPal, Network For Good, or Google Checkout.

I really like Razoo. It is being used by a number of synagogues, especially ones affiliated with the Conservative Movement as the company has a relationship with United Synagogue of Conservative Judaism. You can also see Razoo in action on the website of Shir Tikvah, a Reform synagogue in Minneapolis.

5 Comments on “Online Payments: When “High Tech” is actually “High Touch”.

  1. Hi David,
    This morning (I was still waking up) and saw your subject on “online donations” and thought maybe I might learn something . . . so I am reading it and then I see you are using Shir Tikvah as an example, wait he is talking about us. Yes we have had great luck with RAZOO – we have just gone over $496,000 in online donations in three years. Thanks for waking me up.

    By the way your daughter will need checks at some point at college, I have had to run to my son’s college twice in the last year with a Real Check, lucky he is just across town. He has gone online and ordered checks (all on his own, bright boy), last week after he came home for the summer.

    I will now open your blogs in the future. Thanks again

  2. David–

    I love the posts that you have made…well written, engaging and right on target…for the most part. The request for a “contribution” to cover processing costs continues the congregant as consumer mindset that is anathematic to the successful community building synagogue. Also, an old-fashioned time and motion study would probably prove that the 3% ends up being less costly than the “five + steps” to process a check when you take into account the soft costs. Other than some gas stations, I don’t know of a single successful commercial enterprise that distinghuishes between check writers an credit or debit card payers. But, if congregational leaders are so concerned, let them set up EFTs for their members. Once done and its painless and cost free on both sides. Teh banks lve it most of all. And Jamie Dimon needs the love right now.

  3. Your Blog is very interesting. How can people be in touch with you if they feel their synogogue should hire you? I have always felt that synogogues need to spend some money to make money. Even in these tough times. You should publish this blog in some synagogue bulletins. All the best on this new venture

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