2022 saw lots of great innovation happening in payments, and while it’s impossible (and probably not useful) to implement them all, understanding what’s trending, in terms of technology and also in terms of processes and strategies is always a good thing.
Here we’ve identified and listed some trends and considerations we think should be on your radar in 2023.
First up, its real-time payments. Cash, checks, credit cards, and bank transfers are reducing in popularity while payments made through debit cards, digital wallets, banking apps, and other real-time/instant payments are increasing in adoption.
Real-time payments offer plenty of benefits for charities: more control, reduced missed and/ or failed payments, and a simplified payment process – with real-time payments, the reconciliation process is also mostly automated, meaning you’ll get real-time updates on how your campaigns/ channels are performing too.
The engagement between the payer and payee also improves. Because everything happens in real-time, there is an instant confirmation, and you can instantly trigger customer/ donor payment experiences.
Revenue optimization means looking at ways to maximize revenue/ income. Usually this happens by understanding the cost of acquisition for different segments versus lifetime value, and also balancing new customer acquisition versus driving revenues from existing customers.
While the market for out of the box CRO (Customer Revenue Optimization) software continues to grow, the majority of these processes are possible in Salesforce with FinDock.
The good news is that revenue optimization is not just for for-profits, nonprofits can also apply the principles. If you imagine a donation as a product, you might ask yourself: by how much can I increase the amount so it’s still attractive for my target audience? Or, how can I figure out the optimum donation amount for a specific donor or audience? Or am I better off trying to nurture my existing database or to try and gain net new donors?
Things like historical transaction data, conversion rates, and information related to cost of acquisition will help you make these decisions. The most important thing is that you have access to reliable data in your CRM – keep it clean 🙂
Flexible giving solutions
In 2021, 64% of regular donors said they would welcome the flexibility to change the amount and frequency they donate with. And 42% said they would give more if they were asked. Today, as donors are faced with a cost-of-living crisis, there might be an inclination to reduce their donation amount but this would be preferred over losing a donor altogether. During the recession of 2008, the Irish Hospice Foundation trialled flexible donations and ended up increasing its overall income as a result.
Setting up processes and tools to allow for flexible giving solutions could result in a significant decrease in donor churn as donors feel that there is a sensitivity from the charity partner. It’s important to give donors options for different donation amounts, a “fill in the blank” scenario is least likely to create a positive outcome, a recent study by Wharton revealed.
Diversification of payments
People expect to be able to make a payment using their preferred method, so it’s important for organizations to offer different payment options and to continue to diversify to meet changing preferences. Payment methods increasing in popularity include crypto, NFT, and QR code payments.
In 2021, nonprofits received 16x more crypto donations (compared to 2020) and with an average value of $10,455. Nonprofits, like UNICEF, recognise the potential and are starting to add it as an option for donor payments.
Payments made through digital wallets are also increasing in popularity, as people spend increasing time on their phones. Digital wallets offer a reliable and safe way to pay, conveniently accessible on any smartphone. What new payment methods will you test out in 2023?
We hope these four payment insights will start to trigger some good discussions at your organization and set you up for success in 2023 and beyond.
Change is constant and that’s OK. At FinDock, we make it easy to adapt to changes by offering a flexible, yet robust payment solution on Salesforce.
Want to discuss more ways to make payments work for you? Reach out to start the conversation and we’ll be in touch to set up some time to talk.