While you’ll still hear the Salvation Army’s jingling bells this year, you may hear less change jangling into its red collection buckets.
For 120 years, the Salvation Army has used its red kettles to collect donations that go to low-income families around the holidays. But this year, it has teamed up with Square, a mobile payments start-up company, allowing it to accept debit and credit card swipes.
The Army has realized that a lot of Americans just don’t carry that much change anymore — but we almost always have plastic on us.
According to The New York Times, bell ringers will carry Android smartphones equipped with Square’s card reader in 10 locations each in Dallas, San Francisco, Chicago and New York. Those who want to donate can swipe their cards just like they would at a retail store.
“We’re basically trying to make sure we’re keeping up with our donors and embrace the new technologies they’re embracing,” Salvation Army spokesman Maj. George Hood told the Times. While other organizations have adopted the technology, the Salvation Army is the largest.
But there’s a bit of a catch. A 2.75% fee is included in each transaction, with some of that money going to the credit card companies and the rest going to Square. So if you donate $100, $97.25 would go to the Salvation Army.
The Salvation Army tested a similar program a few years ago when it tried to get donors to use plastic by adding credit card processing terminals at collection sites. But they only raised $60,000 that way in 2009. This year, the Army — which in 2010 collected $142 million for Christmas dinners, clothing and toys to low-income families — believes that Square will be faster (they say a transaction takes about 5 seconds) and more efficient, largely because the mobile system doesn’t require as much data entry as traditional card terminals do.
While there have been concerns over Square’s security — mostly, it seems, raised by competitor VeriFone — there haven’t been any serious breaches regarding stolen credit card numbers or fraudulent purchases. The company says it uses the same security measures as other financial institutions.
All in all, it seems like a smart move for the Salvation Army, especially considering that we have a tendency to spend more using cards than when we pay with cash. Chances are we’ll donate more, too.
Updated, Nov. 17, 12:20 p.m. The 2.75% is actually included in the donation given and is not tacked on to the amount donated.