Uncovering the hidden costs of contactless donations

Uncovering the hidden costs of contactless donations

The emergence of contactless payment technology over the past decade has opened up exciting fundraising opportunities for charities and the voluntary sector, enabling donations to be collected from a new, tech-savvy generation.

A trial last year by Barclaycard underlined the potential of the shift in behaviour and technology, with the average contactless donation being three times higher than the average cash donation in the same collecting environment.

Given the continuing decline in the use of cash in everyday life, contactless handheld devices, displays and stands have made it easier to collect payments from people ‘on the go’ and will remain an important part of the fundraising set-up for many charities in the future.

However, they have also left fundraising organisations to grapple with significant cost challenges.

Unit costs

The most obvious issue is the eye-watering price, which can reach as much as £450 for each contactless unit.

According to Laura Hannan, Founder of the Technology & Innovation Group for Charity Leaders, expensive pieces of equipment need to be built in, or attended, and if someone needs to keep an eye on it, it can pull valuable resource away from another area.

“When you look at the cost of the terminals, often they are just too expensive to have in all the places you would want them, or to leave on their own,” she says.

Then there are other costs, which may be in addition, such as a power and data connection.

Inflexibility

The inflexibility of the technology can also cost charities that are fuelled largely by repeat donations, rather than one-off acts of generosity, Hannan adds.

With contactless devices, the opportunity for future engagement beyond the donation is limited, unless a secondary solution to capture the details of the individual is available.

Moreover, adding a Gift Aid declaration – which allows charities to claim an extra 25p for every £1 donated at no extra cost to the individual – currently isn’t possible through a donation via standard contactless technology.

When the true costs are considered, it is little surprise that few charities can invest, especially when it can take several months for the donations to outweigh the overheads and the return on the initial investment to become positive. That was the case, for example, with the aforementioned Barclaycard trial, in which £20,000 was raised over the three-month fundraising trial via 100 contactless donation boxes, which almost certainly would have cost more than £20,000 to buy.

Using such technology at scale is therefore simply not an option for a lot of charities, many of whom have found out the hard way that contactless technology is not the dream solution after all.

Contactless alternatives without the costs

However, charities are increasingly discovering the benefits of mobile cashless donations.

“When the donation is through mobile as opposed to a bank card, there is more flexibility with what the user journey can be. There is the possibility of a £30+ gift [the current limit for contactless card transactions] and much higher donations with a mobile,” Hannan says.

Thyngs’ mobile platform overcomes the cost issues whilst retaining the ease and speed of contactless donations by turning almost anything into a seamless donation point.

As a QR code or NFC tag can be added easily to a variety of surfaces, including posters, leaflets, stickers, badges and vehicle wraps, there is no need for a power source or ‘minder’.

There is minimal set-up cost and people can make flexible donations through their mobile device, without needing to download an app. The payment is then processed securely through Apple Pay, Google Pay or PayPal.

“With Thyngs, the user can choose the amount to donate and the platform pulls the information into the payment wallet and pre-populates the Gift Aid, which adds 25% to the donation with one tap,” Hannan adds.

“The charity can also offer a marketing opt-in that will encourage repeat donations. When a donation takes place, a small URL is created, and that can be shared by the user, opening up new donation opportunities with his or her friends and family.”

Opportunity to scale

According to Hannan, contactless is something charities should be doing if they have high footfall areas for appeals where one-off donations are needed, and where volunteers, staff or shops can ‘man’ the machines. It’s quick, and meets the expectations of the new generation of donors.

However, these machines cannot be included on every poster, fundraising pack, t-shirt, or collection tin up and down the country.

“Thyngs offers a way of operating in bigger volumes than with standard contactless technology”, says Hannan.

“In the past there was an adoption hurdle, but this has changed. People already have this technology on their phones and the process is so intuitive. As long as there are clear instructions for the user the first time they donate, they will find it easy to repeat the process again and again.”

To find out more about Thyngs’ cashless donation solutions, click here.