What is a Nonprofit Transaction Fee?

When you make a purchase, the store owner isn't the only one who benefits from the sale. In most cases, the bank that issued your credit card also charges a small fee for processing the transaction. This fee is known as a transaction fee, and it typically ranges from 1-3% of the total purchase price. While this may not seem like much, it can add up quickly for large purchases or businesses with high volume sales. Nonprofits are especially vulnerable to high transaction fees since they often rely on donations. To offset this cost, many non-profits choose to use donation processing services that charge lower fees. By understanding how transaction fees work, you can help ensure that your hard-earned money goes where you want it to.