Salvation Army rolls out digital donations with Square

While the adoption of the Square credit card reader continues to grow among large and small businesses, one popular charitable organization has latched onto the mobile payment device for the 2011 holiday season.

Announced within an official blog post at the main Salvation Army site, the charitable organization will accept donations via Square at popular red kettle locations across the United States. The Salvation Army will roll out an initial test of the digital contributions in Dallas, Chicago, San Francisco and New York City. In order to take payments from shoppers walking past the locations, Sprint Nextel has generously donated ten Android smartphones that utilize the Square card reader. After swiping a credit card on the reader, the shopper digitally signs a special app created for the Salvation Army and the donation is directly deposited into the account. Locations that accept the digital payments will likely be marked with information about credit cards to attract more donations.

This initial launch will allow shoppers that only travel with credit cards to make donations and ensures that the donation makes it into the Salvation Army account immediately. While there’s no indication that Square will wave the 2.75 percent fee for all transactions accepted by the nonprofit organization, the security of direct deposit will likely cut down on theft of any cash that’s collected in small amounts. Other organizations have been quick to jump on digital payments as well. According to Ad Age, a troop of Girl Scouts sold approximately 400 boxes of cookies in an hour at the Facebook headquarters by simply offering the ability to pay by credit card through the Square application.

Also announced this week, Square rolled out an update to the application that allows retailers to create a loyalty system for rewarding repeat customers. For instance, if a coffee shop accepts a Square payment from a customer ten times in a row, they may become eligible for an exclusive coupon for a discount on a specialty drink or perhaps a free cup of coffee. This program is designed to reward loyal customers rather than the Groupon strategy of showcasing an establishment to new customers.