Recurring Non-Profit Credit Card Processing Basics

If non-profits take credit cards for donations on a recurring or installment basis, they have to be compliant with all appropriate rules for the processing of each individual card installment. A recurring or installment type of plan is defined as an obligation that could be for a variable or fixed amount, that is agreed to by a customer and paid for with a chain of payments over certain time period.

Recurring Non-Profit Credit Card Processing Requirements

Non-profit credit card processing must comply with a series of requirements for amounts billed to a single card account in relation to a recurring or installment sales arrangement. If a non-profit entity fails to achieve compliance with any one of these rules, or if a donor submits a dispute at any given time over any installment of a recurring plan for the merchandise or services that the non-profit has agreed to perform in connection with it, the issuing bank can, if it decides, charge back the amount of the installment, as well as any preceding installment.

Installment Authorization Approval

Non-profits must obtain an individual authorization approval from the card issuer for each one of the installments billed to a card in relation to a recurring or installment arrangement and the retailer must get this approval before depositing the transaction data with the processor. If the issuing institution authorizes a given installment, this should not be seen as an insurance that any other installments would be either approved or paid.

Consumer Approval

The retailer must obtain the consumer's approval for each recurring installment. Keep in mind that a verbal termination request is all that is required from the cardholder to cancel a recurring plan. The consumer's approval should provide all of the following information:

• Consumer's name, billing address and card number.
• The amount of each single installment, unless it changes.
• Time frame or frequency of the payment installments.
• Length of time for which the consumer authorizes the card acceptor to bill installments to his card account.
• The non-profit entity's merchant account number with the processor.
• Card's date of expiration.
• Installment's single amount.

Recurring Non-Profit Credit Card Processing Rules for Submission of Transaction Data

The payment information that the non-profit entity sends to the processor must be in compliance with the acquirer's requirements. If the merchant agreement is canceled, the non-profit must not submit information for installment types of payments that are payable after the termination's effective date. If a consumer who agreed to an installment plan gets his card terminated, the non-profit should not submit sales information for it as well.