How Does Payment Processing Work for Churches?

Donate with Money in the Hand Icon - Red Button on Black Computer Keyboard.

Tithes and donations are important parts of what keep churches running. In order for pastors and priests to preach, children’s leaders to teach and outreach programs to run, there must be revenue coming in that keeps the lights on, the water running and volunteers able to share generously with the needy.

However, gathering tithes and donations isn’t always easy. Even with a congregation that deeply desires to give, it can be complicated to track scattered amounts of bills from contributions in person, cash checks on time and otherwise manage the various payment methods that people prefer. 

Fortunately, there are payment processing tools that can help streamline this process so church staff and volunteers can focus less on the finances and more on the ministry. 

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How Does Payment Processing Work?

Image of a calculator and piggy bank

Processing payments may sound stressful, but the right tool can make it a lot easier. Payment processing enables congregants to give money, in a variety of ways, to the church and get that money to where it needs to go, whether that be in a bank account, in cash or any other format. 

Here are some detailed explanations of payment processing cycles for online church donations and how money gets where it needs to go. 

Payment Processing Cycle 

For online payments, there are three main steps in the payment processing cycle: card authorization, verification and settlement. 

  1. The first step is card authorization. This happens as soon as the donor submits the donation page or form. It sends a signal to the bank that issued the card, asking them to authorize the transaction. Some issues that commonly pop up at this stage in the payment processing cycle are if the card has insufficient funds or has been marked as lost or stolen. Once the card is authorized, the transaction moves on to verification. 
  2. At the verification stage, the issuing bank confirms that any provided information matches the card provided. This could include the card’s CCV, expiration date or the name on the card. The pieces of information you need may depend on the size of the charge, so be sure to gather any information that is legally required for you to run the transaction. 
  3. Last but not least is the settlement stage. That is when the card’s issuing bank sends the money to the account of the church accepting the donation. This step in the process can take a few business days, depending on the bank. 

For this cycle to work properly, you usually need some sort of online payment gateway. These are technology platforms that manage the communication between the organization accepting payment and the financial institution that issued the payment method. They also usually encrypt the data as it is sent back and forth to prevent fraud. You will also need a church merchant services account, which is a type of bank account that is specifically used for accepting payments, including donations. 

Types of Payment Methods 

One of the main benefits of payment processing for churches is the ability to accept different types of payment methods. Some types of payment methods you may want to accept include: 

  • Debit cards 
  • Credit cards 
  • eChecks 
  • Apple Pay and similar digital wallets 
  • Electronic fund transfers 

Security Protocols and Compliance in Payment Processing

Depending on the types of payment methods you choose to accept, you may need different types of security protocols to keep payments secure and ensure donors won’t have to deal with fraudulent transactions. 

While technically the Federal Trade Commission (FTC) hasn’t issued regulations regarding compliance for this process, there is court precedent that for church credit card processors,  PCI compliance is mandatory. PCI compliance involves several regulations that are broken down into 12 major steps, which Investopedia outlines as: 

  1. Use firewalls to protect data. 
  2. Have tools like two-factor authentication to protect passwords. 
  3. Protect any cardholder data. 
  4. Encrypt any transmitted data. 
  5. Use anti-malware and antivirus software. 
  6. Update software and security systems regularly. 
  7. Restrict access to cardholder data.
  8. Provide unique IDs to those with access to data so it’s easy to track who is doing what. 
  9. Restrict any physical access to data. 
  10. Use access logs to monitor data use. 
  11. Test security systems regularly. 
  12. Create a clear, well-documented policy. 

All these steps help to prevent the theft of both the card information itself and sensitive cardholder information. While it may sound like a lot to manage, there are payment processors that can help you ensure that your donors’ payment and personal information will be kept as secure as possible. 


Why Online Giving Is Crucial for Modern Churches 

Old Woman Giving Online to Her Church with Her Phone

Online payments are becoming increasingly popular, even with the unique rules and risks that come with them. Here are some of the reasons you should consider offering online giving options for your church attendees and the challenges you may face by not doing so. 

Trends in Digital Giving and Online Payments 

Digital giving has grown dramatically in popularity, and for good reason. Back in 2015, only 31 percent of churches reported any use of online giving options. Eight years later, in 2023, that number had more than doubled to 67 percent of churches using online giving services. These options are especially popular with younger church attendees, as they are less likely to carry cash than people over 50 years old.


Advantages of Adopting Electronic Payment Systems 

Some of the advantages of adopting online payment options include an increase in the frequency of donations and, in some cases, even an increase in the amount of money donated. The most likely explanations for this are that online payments are more convenient for many people and often make it easier for people to automatically set up recurring, regular donations. 

Challenges Churches Face in Traditional Payment Methods

With traditional payment methods, like cash or checks, one of the biggest challenges churches face is human error. Was that all singles, or was a $5 bill mixed in? Is this check too old to deposit at this point? These concerns and more can pop up when a church depends on traditional payment methods and, often, a volunteer workforce to collect and track them. 


Benefits of Using Technology for Church Donations 

Image of someone making an online payment

There are many benefits of using online technology for donations, both for your religious organization and for your donors! Here are some of the most popular perks. 

Convenience for Donors

Because online payments can be sent from anywhere, anytime, it’s easier for donors to give on their own time. Different donor-specific features create convenience both in the timing of their donations and the payment methods they have available. It can also give donors more privacy compared to a physical offering plate on Sunday mornings. 

Increased Donations and Tithes 

Partially because of the increased convenience, churches that implement online donations often see an increase in donations and tithes. This gives congregants the pride of contributing consistently to their church and benefits the church itself by ensuring more consistent revenue. 


Enhanced Financial Transaction Tracking and Reporting  

Online donation forms usually include some contact information, such as an email address or phone number. This makes it easier to track who is donating what. It’s also much easier to track exactly how much money is coming in so it can be allocated appropriately. Some payment processors provide helpful reporting tools, like dashboards and charts, to help show how revenue has shifted in recent history and where it is projected to go in the future. 

Free Finance Tools to Build a Healthy Church


Security Features in Online Transactions

As we outlined when discussing PCI compliance, online transactions come with some advanced security features to protect everyone involved in the donation process. This ensures that fraud is less likely to occur, and if it does, it will be easier to catch. 


Features of Vanco's Payment Processing Solutions 

When it comes to payment processing, it’s worthwhile to work with experts. Here are some of the features Vanco offers for payment processing that can benefit your church. 

Online Giving  

The first perk of a payment processing solution for churches, as you may have guessed, is that it empowers you to offer online giving options. From a creative and unique donation page full of custom imagery to a simple donation form, we can help you add online giving options that your congregation will love using. 


In addition to mobile giving options, offering texting as a way to donate makes giving even easier for congregants with cell phones. Members can text a unique 10-digit number from their cell phones, fill in details and information on a registration page and then donate at any time by texting an amount to that same number. And in addition to one-time gifts, donors can make recurring donations by simply texting “Recurring.” It really is that simple! 

Online Worship  

Many churches have continued to reach new audiences with online services over the past decade, but online worship has become especially popular over the past four years. Vanco’s platform involves a far-reaching experience where members can review notes, interact with the material and give to the church, all on one simple page. 


Church Management Software  

Vanco’s solutions easily integrate with the most popular church management software to ensure that your members have a seamless experience. Whether you’re starting with Vanco and want to expand digital options later or searching for a giving platform that will work with your existing software, we’re here to help make sure it’s a great fit. 


Best Practices for Implementing Technology in Church Giving 

Woman Giving to Church Through Text on Phone

Before you share online giving solutions with your congregation, make sure everyone is ready for the change. Some great things to prepare ahead of time include tutorials in both written and video format, an announcement during the service about the new option and why you chose it and thorough FAQs that anyone on staff can easily answer for members. Be sure to explain the process and any transaction fees involved. 


Case Studies: How Vanco Supports Churches  

No matter which of our flexible pricing plans you go with, we have 24/7 customer support that is available to help you expand giving options. We’re always happy to help answer questions and support your mission as you serve your congregation. 

One church that has taken full advantage of Vanco’s platform is Faithpoint United Methodist Church. When they first began offering online giving with Vanco in 2013, about 25 percent of their church members immediately began using it. Since then, that share has grown to 70 percent of members, and there has been a 20 percent overall increase in monetary contributions. This is just one of many churches that use online giving to help their members give consistent donations that support their ministries. 

Here's another one of Vanco's users talking about the big impact it had on her church.



Key Takeaways  

Whether you’ve used other online giving solutions before or you’re new to this world, Vanco’s options are a great way to make giving more convenient for your members. That convenience results in real benefits for your ministries, as it can result in both more consistent revenue and more revenue overall. 



What are the security measures in digital payment processing for churches? 

The best way to have security measures for digital payment processing is to work with a payment processing platform that is already PCI-compliant and takes your members’ privacy seriously. 

How does online giving integrate with existing church management software? 

Vanco’s online giving solutions seamlessly integrate with dozens of popular church management software options, providing an easy experience for your members. 

Can small churches benefit from digital payment solutions?  

Yes, absolutely! It’s important for small churches to select a flexibly priced digital payment solution that can grow with them over the years. 

How does mobile giving work for church congregations? 

Mobile payments can be collected through a page on your website or text-to-give solutions. The donations are processed by your payment processor and then deposited into the church’s merchant account, just like any other form of giving that uses eChecks or card payments. 

What support does Vanco offer for setting up online donation systems? 

Vanco offers 24/7 customer support that is available to help you set up online donation systems and answer any questions you have along the way. 


Unlock the Secret to Successful Stewardship: An Unmissable Guide for Every Church Leader


The topic of money and giving money to the church can be tricky terrain for church leaders. Yet at its core, stewardship is about empowerment, community and growth. With this perspective, we've developed an eBook that reframes this delicate conversation into an empowering discourse. 

Our guide will… 

  1. Help you tap into your congregation’s natural desire to contribute. 
  2. Reveal eight fundamental rules of financial stewardship. 
  3. Showcase 11 untapped revenue sources that could catalyze your church's financial health.  
  4. Detail a foolproof blueprint of 17 key elements to design the perfect stewardship plan. 

Transform the way you approach stewardship and unleash the power of giving with our breakthrough eBook. 

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