Aggregators

The basic definition of an aggregator is an online donation provider that takes contributions from donors on behalf of organizations, not for organizations. This is an important distinction. Aggregators take payments in the Aggregator’s name, not in the Organization’s name. Aggregators use their own merchant accounts and do not set up merchant accounts for each organization.

One of the biggest drawbacks to not having your own merchant account happens when a donor checks their credit card or bank statement. Using an aggregator, the donor will see the Aggregator’s name, not the Organization’s. This can cause confusion and suspicion of fraud on the donor's part as the name of the aggregator will be unfamiliar to the donor.

Aggregators also consolidate funds into their own accounts and distribute them at a later time. Donations made to an organization are distributed according to a schedule determined by the Aggregator and in some cases can be held for weeks without disbursement. During this time funds intended for an organization cannot be accessed; another company has complete control of your funds. The use of Aggregators may represent regulatory and audit issues for certain organizations and you should check with your external auditor for further guidance.

On average, aggregators will have slightly lower fees and faster set-up times, but fewer customization options and less features per application. Aggregators are the least likely to be fully PCI Compliant, and the least likely to undergo annual on-site security audits by independent security assessors.

Gateway Providers (Example: Qgiv)

A gateway is an online donation provider that takes contributions from donors in the organization's name and using the organization's own merchant account. Gateways will set up unique Merchant Accounts for each organization. Gateways will usually handle all the paperwork associated with merchant account setups, shielding the organization from complex paperwork and hassle.

Having your own merchant account is crucial to ensuring that when a donor gets their credit card or bank statement, that organization's name will appear, not the Gateway’s name. This eliminates the confusion and suspicion associated with Aggregators because donors know their donation reached the organization safely.

Gateways never have control or possession of funds given to an organization. Gateways provide the secure link between the donor, the credit card companies, and the organization. This provides secure transmission, authentication and authorization of payment information. Once funds are authorized, payment is distributed to the organization directly from the credit card companies, not through the Gateway. This means funds are available in about 2-3 business days, not weeks or months, and funds are never out of the organization's possession.

On average, gateway providers will have slightly higher fees and slower set-up times but far more customization options and features per application. Gateways are the most likely to be fully PCI Compliant, and are the most likely to be audited on-site annually by independent security assessors.