A new payment start-up formed by London fintech Banked is seeking to expand the amount of money donated to charities by decreasing payment processing fees to just 0.1%.
Processing fees charged by banks usually stand at 2.9% due to the fees incurred by the card networks and associated payment processors.
To put this in context, it is estimated that the UK donates £10.1 billion to charity every year – if just a fifth of these donations were made by card (a moderate estimate), the total lost by charities every year to payment processing fees would be approximately £59million.
Brad Goodall, Banked CEO, commented: “When we donate to our favourite charity, or support a friend or family member fundraising for a cause, we only think about the £10 we’re ‘giving to charity’ and rarely consider the percentage lost to card processing fees.
“On a small scale, it doesn’t seem like much, but when you consider that the UK donates £10 billion to charity every year, the value of donations lost is huge.
“Charity platforms play an important role and do amazing work above and beyond just taking the payment. They need to be supported with a modern payment network that removes the inefficiencies that cause large fees.
“At Banked, we want to revolutionise the payment system for charities and fundraising platforms by virtually eliminating processing fees, so that far more money can go to the actual causes. We are immensely proud to have already partnered with HEROES, which is doing amazing work to support the NHS at this difficult time.”
The Banked payment system is already being used by HEROES, a charity supporting the NHS, and on this occasion, Banked has waived all payment processing fees. Previously, the charity had planned to use a major fundraising platform for their next £1 million target and would have paid the standard 2.9% payment processing fee on all donations.
Dr Dominic Pimenta, HEROES Co-Founder, added: “At HEROES we are constantly humbled and inspired by the generosity of individuals and organisations during this national health crisis. We couldn’t operate as we are today without the support of Banked, who have enabled us to take real-time payments, and removed the transaction fee (which can be close to 2.9%) meaning we can get more critical funds to the frontline NHS, and fast.”
Expert Analysis: This is a perfect example of a fintech utilising its expertise for the right reasons and an overall fantastic cause. The launch couldn’t have come at a more apt time, with people enthused to offer what they can to charities during the period they need it most.