The United States is rapidly becoming a cashless society with less than 30% of sales transactions involving cash. Your Scout unit can leverage smartphones and free card readers to accept credit and debit card payments.
Portable Card Readers Enable Cashless Fundraising
For years, the only way to accept credit or debit card payments required a rented credit card machine with a contractual commitment and hefty transaction fees. Recently, new transaction processing services have become available that avoid the expense and commitment of commercial transaction readers by leveraging the ubiquitous smartphones that many people carry.
These new services require no setup fees or commitment and allow almost anyone to accept credit or debit cards for a nominal percentage of the transaction. These services also allow you to manage cash and check payments. All of these services provide a free card reader that plugs into the headphone jack on your smartphone and apps for IOS or Android.
Several companies provide these services:
- Square was the first of these services. Square charges 2.75% of each transaction
- Paypal Here charges 2.7% of each transaction and also allows you to accept Mobile PayPal
- Intuit GoPayment charges 2.75% per transaction but also has subscription plans that allow you to pay a monthly fee of $12.95 to get a lower rate of 1.75% per transaction. It also integrates with Intuit QuickBooks.
This is only a partial list. There are a number of other vendors jumping into this area so you might want to look around for the best deal. Payment plans and rates are subject to change, so be sure and check the vendor web site for the latest rates and plans.
Do not let the transaction percentage scare you off. Using any of these services is going to cost you a small percent of the sales, but the point of using these services is to make sales that you would otherwise lose.
For example, one of my Troop’s major fundraising events is Christmas tree sales. Traditionally we only accepted cash or checks, but started using Square on an exception basis in 2012. That first year, about one third of our sales were made using Square—sales that we might have lost if we could not accept credit cards. In 2013, about 70% of our sales were through Square.
How Do Cashless Transactions work?
Since my Scout Troop uses Square, my experience is with that particular service. I would expect that using one of the other providers would be similar.
- During a transaction, the seller would plug the Square Reader into the smartphone headphone plug and start up the Square Register app.
- You enter the transaction amount and then swipe the customer’s credit card using the reader.
- The customer then signs the screen using their finger.
- If the customer wants a receipt, you can have them enter their email address. In about 24 hours, the money, minus the transaction fee, is deposited to your bank account.
Getting Started with Square
There are only a few setup steps needed to accept payments via Square but it does take a few business days to get everything done. Do not wait until the last minute!
What you will need:
- An email address (for Square transactions and notices).
- I used an account with automatic forwarding so that all Square emails are sent to me and to our unit finance chair. By default, Square will send an email for each transaction.
- A check for the Scout unit checking account for bank routing and account number information
- I strongly recommend that you do not use your personal checking account
- A smartphone (iPhone, Android or iPad) with a data plan
- See Square’s web site for supported devices
- Time to receive the Square reader in the mail and to validate the bank account
- It took about four business days for the bank account to get validated and for deposits to start showing up
- Square says that it should take about 7-10 days to receive the free Square reader from them. You can also purchase a Square reader from Target and other stores for $10 if you cannot wait.
Setting Up Your Square Account
- Got to https://squareup.com/ and click on “Get Started”
- Enter the email information and choose a non-trivial password
- Press “Create Account”
- Enter the address where you want your free Square Card Reader to ship to. Click “Continue”
- Select your business type from the drop-down list. Enter your business and personal information. I choose the name “BSA Troop 413 Austin” because that is what will show up on the receipt. I also uploaded a logo with the Troop information on it. Click “Continue.”
- You will answer a few questions to verify your identity. When completed, click “Finish.”
- Now you will link your bank account to your Square account. Click “Add Account”
Square will make a series of small deposits and matched withdrawals to validate that the new account is valid. This may take several business days.
- Confirm your mailing address to ensure your Square card reader arrives at the correct location. Click “Send my Reader.”
- After you have completed the basic registration, You can add a list of items to make it easy to perform the transactions. Click on “Items” at the top of the Square profile to add common transaction items.
For example, I set up a number of “Christmas Tree” items at several common price points.
Square provides the capability to process refunds. As an extra security measure, I set up the account to require a PIN to process refunds.
- Click on “Employees” to set the PIN and select which tasks require a PIN.
A special note about tax reporting.
Square automatically file a IRS form 1099-K for all businesses that have more than $20,000 in gross sales and more than 200 transactions in a calendar year. Non-profit organizations are included. If you anticipate anticipate total sales of this level, you should insure that your Square account includes your Employer Identification Number (EIN).
- To enter your Tax EIN and other related info, go to https://squareup.com/taxupdate
- Download the “Square Register” App for your phone.
Now all you have to do is wait for your free Square reader to arrive in the mail.
- Plug the Square Reader into your headphone jack on your smartphone and start the “Register” app.
- Log into the app using the email address and password you used for your Square account in Step 2 above.
- You can now enter an amount for the transaction and a note.
If you set up Items in Step 9 above, you can press the center icon on the screen to bring up the Item list (right, below). If you have multiple price points for an item a secondary list will be shown (left)
- Click on an item to select it (or just enter the amount if you are not using pre-built Items)
In this example, I clicked on the “$100 Christmas Tree” item.
Note that the number of items is “1” and that the total is “$100”. The list of items stays up so you could add more items.
- Click on the “Charge $100” on the screen.
- The Register app will now give a choice of how to pay. Click on the Credit Card icon
- You should now be able to swipe credit or debit cards using the Square Reader.
- Then the client signs with their finger.
- If the customer wants a receipt to be mailed or texted to them, you can do that next.
If not, you are done!
More than Just For Popcorn and Christmas Trees
These transaction-processing services have obvious uses during fundraising activities, but the fact that you can take payment from a credit card can also help parents pay for expensive items like Summer Camp or High Adventure trips. Instead of parents making multiple payments to the unit for these trips, the unit could swipe their credit card for the total amount; simplifying unit bookkeeping.
You could also considering using these services as a way to collect for Friends of Scouting by collecting contributions during the FOS presentation and later cutting a check for the total amount to the Council.
Square and similar services allow Scout units to take advantage of the consumer trend away from cash payments. Not only is it more convenient for customers, but it also shows that Scouts are able to leverage the most recent technology.
Jay Kruemcke firstname.lastname@example.org
BSA Troop 413 / Armadillo District / Capitol Area Council