By Alex Coleridge, founder of TapSimple
The pandemic has accelerated the shift to contactless and cashless payments, which was already gathering speed. Recent data from Mastercard found that 66 per cent of card transactions in the UK are now contactless and 76 per cent of Brits say they will continue using contactless payments after the coronavirus crisis has passed. This data points to what most of us already know: that cash is in a state of terminal decline. New technologies, shifting consumer behaviour, and fear around the hygiene of physical money has meant that cash is no longer king.
The effect on the voluntary sector is significant; traditional fundraising methods such as bucket collections or cash donations at charity events are increasingly no longer viable. Nonetheless, this change equally presents an opportunity for charities to adapt and evolve. Cashless donations can reduce the cost of reporting and reconciliation, cut the risk of missing funds, and allow fundraisers to better analyse and optimise their campaigns.
It is crucial that charities leverage new payment technology and move to get ahead of the curve. Society’s dependence upon the voluntary sector to support those in need will be stronger than ever as we look ahead at the continuing fallout from climate change, ageing populations, and the impact of a global pandemic. As such, there are a number of ways in which cashless payments can be utilised to enable charities to function more efficiently, improve engagement with supporters, and find more effective ways to raise funds.
The state of play for the charity sector
The voluntary sector has an annual income of more than £75 billion per year in the UK alone – this is more than the British automotive industry. Thus far, charities of all sizes have suffered from outdated technology, which results in inefficient fundraising techniques, issues with data management, and a lack of innovation.
Some industry commentators have concluded that the sector is between five and ten years behind the commercial sector when it comes to embracing the digital revolution; a leap forward in innovation in the charity sector is long overdue.
How charities must adapt
The upcoming two years will be a critical moment for many charities, who must embrace new technologies, or fail. The voluntary sector must move towards contactless payment solutions, particularly those that are designed with charities in mind. At present, just 4 per cent of charities make use of these systems, yet 73 per cent find street giving is failing due to the decline of cash.
With loose change in your pocket fast becoming a thing of the past, charities must ensure that supporters can donate with just a tap. In 2018, contactless payment adoption increased threefold, with Brits tapping over 3 billion times and spending £25 billion through contactless payments- and this will only increase as a result of the pandemic.
Those charities that have implemented contactless and Chip & Pin technology, such as the NSPCC and Christian Aid, are already seeing the benefits to their face-to-face fundraising- regularly finding donation amounts are three or even four times higher.
As well as this, developments in some Contactless and Chip & Pin systems mean that fundraisers can also collect Gift Aid declarations, ensuring that every donation gets a further 25% boost.
But charities will need to go further- embracing a range of online fundraising methods alongside the switch to contactless. Donors expect to be able to give on desktop and mobile, and charities need to ensure they have fully optimised their online giving to accommodate.
This doesn’t just mean setting up a giving page, although that’s important; many charities have been using virtual events to reach large and disparate audiences and combining ticketing, video conferencing and the ability to accept donations directly during events.
The future for the voluntary sector
2020 will have long-lasting implications across all industries, and economic recovery will be shaped both by new and emerging technologies, as well as business’ abilities to adapt to change. Purpose-driven UK tech companies are stepping up, with investment in UK tech companies addressing the UN’s Sustainable Development Goals nearly doubling in the last year. This indicates that the charity sector will have a myriad of opportunities to find the tech solutions it needs to tackle historic inefficiencies, reach wider audiences and overcome new challenges.
As the fundraising environment shifts, and consumer behaviour alters, charities will need to continue evolving to find new ways to connect with their target audiences and to gain donations. The rise of cashless payment technology means it is easier than ever for supporters to donate at the touch of a button, and charities who take advantage of this tech can maximise their fundraising and thrive.
Global Banking & Finance Review
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