In the evolving landscape of digital payments, churches are increasingly turning to platforms like Cash App to facilitate donations. This mobile payment service allows for quick and simple transactions, but before integrating Cash App into your church's financial operations, it's important to weigh its benefits and drawbacks.
Advantages of Cash App for Churches
- Fast Deposits: Cash App typically ensures that donations are deposited into the church’s account within one to three days, depending on the donor's bank. This quick turnaround can be crucial for churches needing timely access to funds.
- Ease of Giving: Setting up a Cash App account is straightforward. Donors can quickly register with just their name and bank account details, and start making donations almost immediately.
- Simplified Donation Process: Donors don't need extensive details to send money; a church’s cell phone number is sufficient. This simplicity can enhance the donor experience and potentially increase the likelihood of repeat donations.
Disadvantages of Cash App for Churches
- Costs Associated with Instant Deposits: While Cash App offers an instant deposit feature, it comes at a cost—1% of the donation amount. For churches, this could mean a significant reduction in the total funds received, especially with large donations.
- Additional Charges for Credit Card Donations: Donors using credit cards to fund their Cash App transactions incur a 3% fee. Although this charge is borne by the donor, it may discourage them from giving more or using this method altogether.
- Limited Support for Churches: Cash App’s primary focus is on peer-to-peer transactions, not supporting nonprofit organizations or churches. This lack of dedicated support can be a drawback for churches looking to expand their donation strategies or needing specific assistance.
SteepleMate Improves Church Donation Experience
Let's run through a scenario where a donor contributes via SteepleMate and CashApp.
Donor Gives $50 to Tithe and $50 to Missions using their credit/debit card:
- Using SteepleMate: SteepleMate allows for these donations to be processed as one transaction, even when designated to different categories or accounts.
- Using CashApp: Cash App processes each donation category as a separate transaction if they need to go into different accounts, potentially doubling the transaction costs if instant deposit is used or if separate accounts are needed.
- SteepleMate: Donor optionally elects to cover 3% of the total transaction for the church.
- CashApp: Donor must pay 3% of the transaction.
Net Amount Received by Church
- Using SteepleMate: Net amount $99.50
- Using CashApp: $99.00
+ SteepleMate Funds Distribution: while $50 goes to the tithe checking account and $50 goes to the missions checking account. This split is handled automatically by SteepleMate, simplifying financial management and ensuring funds are directed AND deposited to the intended accounts.
Transaction Fee Calculation with Cash App (assuming standard deposit)
- No transaction fee for standard deposit (1-3 days).
- If instant deposit is chosen, there's a 1% fee per transaction.
If using instant deposit
- Instant Deposit Fee for Tithe: 1% of $50 = $0.50
- Instant Deposit Fee for Missions: 1% of $50 = $0.50
- Total Instant Deposit Fee: $0.50 + $0.50 = $1.00
Net Amount Received by Church with Instant Deposit
- Total Donation: $100
- Total Fee: $1.00
- Net Amount: $100 - $1.00 = $99.00
Funds Distribution
- Assuming no additional fees for moving funds to separate accounts (a potential oversight in Cash App’s capabilities), each $50 would need manual management to ensure it reaches the correct destination.
Using SteepleMate, the church incurs a slightly higher fee of $3.29 for a single $100 transaction, but benefits from integrated financial management where funds are automatically split into designated accounts, saving time and reducing administrative overhead.
With Cash App, the fees might be lower at $1.00 (with instant deposit), but the process lacks automation for directing funds into separate accounts, potentially increasing administrative work or necessitating additional transactions (each with possible fees) to manage fund distribution correctly.SteepleMate Advantage:Integrated account managementLower administrative burdenTransparent and predictable fee structure