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Be Aware of Security Issues In Using Mobile Pay Devices

Many churches and other non-profit organizations now accept online and credit card contributions. Typically, the credit card transactions can be made through the organization’s website or through a kiosk located within the organization’s facilities.  In recent months the availability of mobile pay devices has become more widely available. These devices allow the organization to use smart phones, tablets, or other devices for accepting payments.  The most common providers of this technology are PayPal Here and Square.  Typically, after signing an agreement with the company, the appropriate hardware will be provided to the organization, giving them the ability to accept mobile payments. There may be a charge for the hardware. And, the organization does charge a fee based on the dollar amounts that are processed.

While one’s first thoughts with mobile payments is the acceptance of contributions, mobile pay devices are more applicable for accepting payments for ticketed events, concessions, or other activities in “remote” locations. It is beneficial to the organization to have the ability to accept such payments as people today do not carry large amounts of cash with them.  Although it is possible to accept contributions within the organization’s buildings using a mobile pay device, this is not recommended as there are better solutions for making credit card payments on site.

The organization should be aware that in accepting credit card payments they should make use of the “chip” technology that is becoming more readily available. Due to changes in how the credit card processing organizations operate, merchants not using the chip technology are subjecting themselves to an unnecessary level of liability in the event there are problems with the credit card.

When accepting mobile payments, the primary concern for the organization is security.  The primary issue is the risk that the payments will not make it to the organization. In order to combat this risk, the organization should only allow official organization devices to be used. These devices should be conspicuously identified as organization devices.  Secondly, the organization should control access to its account.  Those using the devices, as well as anyone in the organization’s accounting department should not have access to the account.

The organization should post a notices stating that the charge will appear on their credit/debit card statement as “XXXXX.” This has the potential to alert the customer that the purchase was not credited to the proper merchant.

There should be a process in place to allow the organizers of the event to determine if the correct amount of money had been collected. For example, numbered tickets to the event are a good control device. If the ticket numbers began at “1” and the first remaining ticket is number “251”, then you should have collected revenue for 250 tickets. Checking the receipts for can help determine that all sold tickets are properly accounted for. Finally, use the technique of ‘management by walking around.” Oversight and supervision are useful in helping combat fraudulent activities.

Mobile pay technology is in its infancy and changes are likely to occur in the future. However, the basics of good internal control will remain.



Dr. John Stancil (My Bald CPA) is Professor Emeritus of Accounting and Tax at Florida Southern College in Lakeland, FL. He is a CPA, CMA, and CFM and passed all exams on the first attempt. He holds a DBA from the University of Memphis and the MBA from the University of Georgia. He has maintained a CPA practice since 1979 with an emphasis in taxation. His areas of expertise include church and clergy tax issues and the foreign earned income credit. He prepares all types of returns, individual and business.

Dr. Stancil has written for the Polk County Business Journal and has presented a number of papers at academic conferences. He wrote the Instructor’s Manual for the 13th edition of Horngren’s Cost Accounting. He is published in the Global Sustainability as a Business Imperative, Green Issues and Debates, The Encyclopedia of Business in Today’s World, The Palmetto Business Review, The CPA Journal, and in the NATP TaxPro Journal. His paper, “Building Sustainability into the Tax Code” was recognized as the outstanding accounting paper at the annual meeting of the South East InfORMS. He wrote a book entitled “Tax Issues Faced by U. S. Missionary Personnel Abroad ” that will soon be published.

He has recently launched a new endeavor, Church Tax Solutions, which presents online, on demand seminars on various church and clergy tax issues.

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