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The Top 5 Alternatives to PayPal for Nonprofit Organizations

Tatiana Morand  01 April 2020  0 comments
 

alternatives to paypal for nonprofits

 

Michael opened up his laptop after hours and headed straight for Google. He knew he had to find an online payment provider that could bring his small animal services nonprofit into the 21st century, but the options seemed endless.


Of course he had heard of PayPal, but he wasn’t sure if it was the right fit. Before making a decision, he wanted to understand what else was on the market. Michael typed “alternatives to PayPal for nonprofits” into the search bar, and started reading through the results.


For anyone working in the nonprofit space — or for anyone who sends or receives online payments, for that matter — PayPal has become a bit of a household name. 


It’s straightforward, it’s convenient, and for the most part, it gets the job done.


But does that mean it’s the best option for your organization with your unique situation and needs? After all, there are a lot of things to consider when selecting your online payment service provider.


Or maybe you’re not even accepting online payments for your nonprofit at all right now. If that’s the case, you could be missing out on a major number of donations.


But if you’re reading this article, you likely already know that you need to select the perfect online payment provider for your nonprofit.


Luckily, you’ve come to the right place. I’ll be covering:


Read on to find out more about both PayPal and alternatives to PayPal for nonprofits.


Looking for membership management software that comes with an integrated payments processing system? Find out why Wild Apricot is used by over thousands of nonprofit organizations. Start a free 30-day trial now.

Overview of PayPal for Nonprofits

PayPal is a well-known, easy-to-use digital payment platform built for business, charitable, and personal use. 


With its quick set-up process and the ability to send and receive multiple currencies all around the world, it’s a popular choice for organizations looking for a donation payment gateway and payment processor all rolled into one (for more information on payment terminology, check out our complete guide to understanding online payment services).


And as a comprehensive payment service provider, PayPal has something to offer organizations of any size, from donate buttons to checkout pages to pro payments. 

 

 

PayPal Checkout

But the one question we get asked from organizations over and over again…


“Payment providers can get really expensive. Is PayPal free for nonprofits?”


The short answer: no.


BUT if you can verify your organization’s charitable status — in the United States, for example, this means proving that you’re a 501(c)3 nonprofit organization — you’ll be able to take advantage of their special charitable rates.


This means paying 2.2% + $0.30 per transaction instead of the 2.9% + $0.30 per transaction that a regular business would pay in the U.S.

3 Pros and Cons of Using PayPal as a Donation Platform

However, like anything, PayPal has its pros and cons. I’ve outlined three of the biggest for you below.

Pros of PayPal for Nonprofits

1. It’s the Popular Kid in School

PayPal is one of the most widely-used payment processors on the market, so there’s a good chance your donors have already used it or even have their own accounts.


This removes a potential objection they might have and makes it just that much easier to accept donations.


But in case you were concerned, donors don’t need their own PayPal account in order to donate via PayPal. It works as a third-party payment processor, so it can accept most major credit cards, including Visa, Mastercard, and American Express.

2. It’ll Keep You Safe

PayPal handles all of your customers’ payment details itself, meaning you don’t have to store any sensitive information on your server.


PayPal also offers purchase protection in the case of fraudulent transactions.

3. Get Started in 1, 2, 3

There’s no doubt about it — PayPal is a user-friendly tool with an intuitive interface that just about anyone can get up and running.


And even if you do get stuck, PayPal has extensive online resources and customer support that’ll solve your problem in no time.

Cons of PayPal for Nonprofits

1. It’s Not Always the Cheapest Option

PayPal doesn’t have initial set up or monthly subscription fees in order to use their services, but there are a few areas where there are additional costs you should be aware of.


For example, if you’re a U.S.-based nonprofit accepting U.S. dollars from someone outside the U.S., then the fee you’ll pay will actually be 3.7% + $0.30 per transaction, instead of the domestic rate of 2.2% + $0.30 per transaction.


There are different fees for foreign currency conversion, in-person donations, and more, so it’s important to understand the fee structure for the services you’re planning on using to avoid any costly surprises.

2. Visitors Might Not Stay 

PayPal is a third-party solution. That means that, unless you have PayPal seamlessly integrated into your website (such as via a custom branded checkout with PayPal Payments Pro), making a donation via PayPal usually takes people away from your site and onto the PayPal payments page.


When this happens, they might not return to your site after they make their donation, or they might fall off midway through and not donate at all.

3. Not Everyone Can Use It

Although PayPal is available in over 200 countries and 25 currencies worldwide, there are still some markets that don’t allow transactions.


If you work in or accept donations from people in locations outside of PayPal’s domain, you may want to look for another platform to avoid losing potential funds.

5 Alternatives to PayPal for Nonprofits

Feeling like Paypal might not be right for your organization? 


Here are five other options you might want to investigate. 

1. Stripe


Stripe is one of PayPal’s biggest competitors, and with good reason. It’s a global payment service provider that processes billions of dollars every year for businesses and nonprofits. It supports over 135 currencies and has a robust developer platform as well as a number of third-party integrations.


Stripe offers a discounted rate to registered nonprofits, which is typically 2.2% + $0.30 per transaction in the U.S., or on par with PayPal’s base rate.


Most notably, Stripe checkout forms are embedded directly into your nonprofit website, so donors aren’t directed to external sites to complete their transaction. The forms look modern and professional, as shown in charity:water’s donation page below, and guarantee a smooth donation process from beginning-to-end.

 


Stripe charitywater

2. iATS Payments


iATS Payments is an online payment service provider that was founded specifically to help nonprofits raise money simply and easily. With over 20 years in business, today iATS works with over 10,000 nonprofit clients around the world.


It offers credit card, direct debit, and ACH processing for your nonprofit, all at varying rates, and integrates with dozens of nonprofit software companies you might already be using. 


Although iATS stands for International Automated Transaction Services, iATS only accepts credit card donations from about 40 countries, and only accepts direct debits from Canada, the United States, and the United Kingdom, so if you have a large international donor base, you may want to look into another option.


iATS’ form templates are fairly basic on their own, and without any custom code, can tend to look a bit dated. Check out a sample form for the Aura Foundation below.

 

IATS Payments Aura Foundation

3. Authorize.Net

Authorize.Net is a payment solution that’s actually powered by Visa. It has also been in business for more than 20 years, and is a trusted payment provider for businesses and nonprofits alike.


It’s important to note here that Authorize.Net is one of the pricier options on this list, with a base rate of 2.9% + $0.30 per transaction and an additional monthly fee of $25.


If your nonprofit processes more than $500,000 in donations annually, you may be eligible for a discount with their enterprise solutions, but for most small nonprofits, that’s not going to be available.

See below for an example of how The D’Addario Foundation uses a plain Authorize.Net checkout form to process donations on their website.

 

Authorize.Net



4. Wild Apricot Payments

Wild Apricot Payments is Wild Apricot’s own alternative to PayPal, available to paid Wild Apricot members. Wild Apricot Payments is powered by AffiniPay, a credit card processing company for associations.


Both Wild Apricot and AffiniPay are fully PCI compliant, and were built specifically to handle nonprofit donations, so you never have to worry about your funds again.


Comparable to a few of the other alternatives on this list, Wild Apricot Payments pricing is 2.9% + $0.30 per transaction, with no set up or monthly fees.


You can see an example of how the Los Angeles Book Club uses Wild Apricot Payments below, or sign up for a free 30-day trial to test it out for yourself.

 

Wild Apricot Payments



5. Moneris

Moneris was founded by RBC and the Bank of Montreal, and has made quite a name for itself as one of Canada’s top payment providers. It has excellent customer service, and offers solutions for website checkout, physical terminals, and mobile payments.


However, most plans with Moneris have monthly fees on top of their base transaction rates, and unfortunately, Moneris locks users into lengthy contracts, so you have to be ready to stick with them for the long-term.


Nonetheless, it’s still a popular choice, especially for Canadian nonprofits, like Ronald McDonald House Charities shown below.

 

Moneris

Now that Michael knows all the different alternatives to PayPal available to nonprofits, he’s much more confident in selecting the best online payment service provider for his organization.


Which one would you choose? Let us know in the comments below!


Tatiana Morand

Posted by Tatiana Morand

Published Wednesday, 01 April 2020 at 10:18 AM
Sorry, this blog post is closed for further comments.

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