We are a service application provider to charities in the UK. We
would like to demonstrate to charities and donors that donating online
is the most cost effective means of donating. We've seen some research
(we think by a major consultancy or accountancy firm)that demonstrates
that paying by cash is the most expensive for the recipient/payee,
followed by paying by cheque, followed by paying by credit card.
Costs need to include processing, data inputting, collating
cheques/cash, banking cheques/cash, banking charges, employee time,
time-costs of receipt of funds, etc. We'd like to find properly
researched comparisons. Comparisons between cash, cheques and
electronic payments can be found(if not easily). We have not been
able to find any comparisons which include online credit/debit card
transactions, and would be iterested in doing so |
Request for Question Clarification by
webadept-ga
on
12 Feb 2004 07:40 PST
I'm not sure I can completely answer this question, since many
services charge at different rates and provide different levels of
service. "Costs" is a very general term relevant to the group or
company you are focused on.
For instance, PayPal charges me 2.2% +.30 for each transaction. This
is my final cost for that transaction. All my records are kept, my
database is updated, my quarterly and yearly taxes figured, in all
forms, which deal with that transaction. So, the whole thing costs me,
exactly, 2.2% +.30. No personnel charge for logging in and downloading
files, or uploading those files into spreadsheets... nothing. I get
paid, that is done, instantly.
This is me, dealing with PayPal. Your group, without a level of skill
with CGI programming or database work, have a few other steps, and
therefore other costs, even though this is the same service with the
same rates.
I guess what I'm asking here, is "what are costs" and "which services"?
webadept-ga
|
Clarification of Question by
zer-ga
on
12 Feb 2004 08:47 PST
Thanks, very impressed by the speed of your response.
That's my very point. We charge charities 5% of the donation but we
want educate charities by proving that despite this it's the cheapest
way of receiving a payment. The report to which I referred in my
question (but which I simply cannot find online - I think it was by
PwC) pointed out that it costs something like £12 to process a cash
payment, £6 to process a cheque payment and simply the actual
percentage amont to process an online CC payment especially when the
company (ie the intermediary like us) pays the money stright into your
bank account every week and provides you with fully reconciled
accounts available online.
If you do a Google search you'll find some stuff comparing cash and
cheque payment costs with electronic payment costs but nothing with an
online payment comparative analysis. Thisis what I really want. Many
thanks.
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Request for Question Clarification by
webadept-ga
on
13 Feb 2004 07:09 PST
Hi,
After several hours, scanning every cranny I could think of looking
for this thing, I?ve decided I can?t help you much with this. For one
thing, most of the papers and reports I?m finding are from 1998 ?
2001, back when this use to be a question, but these days, it is more
or less a given, and as you have found, no body seems to want to sit
around restating the obvious. My personal experience in this area, is
simply this; I wouldn?t be able to stay in business if I didn?t have
an automated electronic means of keeping up with my bookkeeping and
transaction costs.
However, I have a great deal of experience in this area, and may be
able to help you with the sales pitch. First off, most people are
aware that there are electronic means of dealing with transactions,
which are hyped to save time. Most, in this day of age and wonder,
have also heard horror stories surrounding attempts to implement these
ideas. There are more horror stories out there, than success (or at
least the horror stories are louder). I worked for a company a while
back who had a MAS90 system installed. It was absolutely amazing how
much time this automated system added to the simple task of taking a
order over the telephone.
So, first off, show, don?t tell. If you can take in a donation for
these folks, and upload it into their system, seamlessly, with
complete automation, show them this. Take a disk over there and put it
in their system and upload it, or download the file, or whatever it is
you do, because nothing less would convince me. You are going to
charge %5 on the transaction. My experience with non-profits is, this
is about one fourth of the profit margin as they stand now. That is a
big number to these folks, when they look at it on paper. Accept that
fact. Right now you are an untried, untested possibility. If you can
show them that this %5 is actually saving them %3 on the %8 they are
spending now, then you have a hands down sale.
It has been my experience that these folks rarely use up-to-date
software, and they won?t want you in their system messing around. What
I do is set up one of my systems, with their system and bring them
over to the office and show them there, where they aren?t sitting on
pins and needles watching me mess with a system they know little
about. Just an idea. Laptops are good for this as well.
Anyway, I?m sorry I couldn?t find a real report for you worth your
bid. I did find these, and you are welcome to them, and if they help,
great, ? if not, well you didn?t spend a great deal of money on me
getting them.
Have a great day and good luck with this.
http://www.epaynews.com/statistics/purchases.html
http://www.bizcashflow.com/cost_of_invoicing.htm
http://www.irlgov.ie/committees-99/c-enterprise/rep-ecommerce/default.htm#Electronic%20Commerce%20Streamlines%20Operations%20and%20Reduces%20Costs
://www.google.com.ni/search?q=cache:KtenX4HTtP8J:snad.ncsl.nist.gov/fededi/resources/documents/archdoc/chapter2.pdf+%2B%22small+business%22+%2B%22transaction+cost%22++site:gov&hl=en&lr=lang_en&ie=UTF-8
http://www.washingtontechnology.com/news/15_11/tech_features/1727-1.html
http://www.smartecon.com/products/eec/ec09.pdf
webadept-ga
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