Square is a free mobile credit card processing app/device available for the iPhone, iPod Touch, iPad, and Android. Transactions are completed using the swipe device (also free) that plugs directly into a headphone jack and documented with receipts that can be sent out and stored online. Unfortunately as a result of the widespread excitement (see the Mashable article), there is currently a shortage of hardware devices, though their co-founder did recently travel to China to find a new manufacturer.

So what does this all mean for the nonprofit world?

It’s not uncommon for anyone involved with a nonprofit or charitable cause to hear “I’d love to give, but I don’t have any cash” or “I’ll donate online when I get back” from friends, family, and strangers.

While processing fees can certainly add up, the Square app/device could help collect donations on-the-spot (hopefully avoiding the previously mentioned excuses), and also increase the individual donation amount. Ideally the increased levels of giving would offset the current 2.75-3.5% + $0.15 processing fee that Square charges per transaction.

Just this past holiday season, The Salvation Army provided bell ringers at approximately 300 locations with kettles equipped to accept donations via credit card. Just in the first year that they were rolled out in 3 major US cities, average donations increased 500% which helped to contribute to their record setting year for the Red Kettle Campaign bringing in $130 million in donations. 

Fundraisers that are focused on volume of small donations will probably see the greatest benefit from this app/device.  I can only imagine all of the effort that goes into a charity – grocery store partnership to allow for the grocers to ask customers for $1 donations. Clearly not every nonprofit has a legitimate chance of setting up a partnership like that, but who is to say they could not try and do the same at a local festival or concert at a college? My guess is that this would be a lot easier and require very little money, staff, and logistical support…

As of now, the only real downside that I see with the app (since I can’t actually use it yet…) is the perceived security risk. Even if Square can assure absolute security, potential donors (myself included) may still be hesitant to have their credit card information processed through a users device rather than a piece of technology dedicated to this purpose.

Anxiously awaiting my hardware device,

Jeff