How to Choose the Right Payment Processor for Your Nonprofit: Comparing PayPal and Stripe

Philip Manzano • Apr 04, 2018

Accepting donations on your nonprofit website requires a payment processor. Two of the most popular options for nonprofits are PayPal and Stripe

At Keela, we always get questions about the best payment processors for nonprofits. And it can be a tough choice – both Stripe and PayPal offer top-of-the-line features that help nonprofits streamline donations. 

In this blog, we’ll break down the benefits of Stripe vs. PayPal for nonprofits to help you make an informed decision.

Comparing Stripe and PayPal for Nonprofits

Both Stripe and PayPal enable your organization to accept donations online and in person (and good news — Keela integrates with both of them!). Before you decide on a payment processor, you should sit down with your team and decide what features are most important for your organization based on your current and planned nonprofit fundraising efforts. Let’s break down some of the main differences:

1. Security

Stripe: Stripe features advanced fraud monitoring, chargeback protection and security features. It meets compliance for PCI-DSS and other regulations across the U.S., Canada, Europe and Australia.

PayPal: PayPal is also PCI compliant and includes automatic fraud screening to protect you and your donors. 

2. Data Portability

Stripe: If you decide to stop using Stripe for your nonprofit, you can easily migrate your donors’ credit card information to another processor. For PCI-regulated data, such as credit card numbers, Stripe will securely transfer the data for you. For non-PCI-regulated data, such as payment history, you can export the data yourself. 

PayPal: PayPal makes more difficult to hold onto your data if you decide to move your nonprofit to a new payment processor. If you stop using PayPal, you won’t be able to transfer credit card data. Your donors will be required to sign up again to donate.

3. Contract Length and Early Termination Fee

One of the great things about both Stripe and PayPal is that they do not lock you into contracts. Both of the services are pay-as-you-go. This means that you can leave at any time, and you won’t have to pay an early termination fee.

The pay-as-you-go model gives your nonprofit the flexibility to try out each system and settle on the one you think fits best, without the fear of over-spending or breaking contracts.

4. Ease of Use

Stripe: Stripe’s value lies in its developer tools and customization opportunities. It’s an attractive option for nonprofits who want to maintain consistent branding across all donor touch-points. If you’re not tech savvy or prefer to keep the setup process simple, PayPal may be a less stressful option. 

PayPal: PayPal makes it very easy for anyone to set up and start accepting payments with little to no coding experience (although it does offer developer tools if you need them). You can integrate with third-party ecommerce platforms for an easy setup or create a custom site with payment buttons. Ease of use makes PayPal an attractive option for nonprofits.

5. Customer Service & Support

PayPal: PayPal offers lots of support for their customers and allows you to get help through multiple different channels. Among the areas of support are:

  • Help Center 
  • Email Support
  • Live Chat
  • Twitter and Facebook 
  • Community Forum
  • Phone Support

Stripe: Stripe also has various support channels available:

  • Help Center
  • Email Support
  • Developer Documentation
  • Freenode-Based Chat Support for developers
  • Facebook and Twitter
  • Live Chat 
  • Phone Support

Whether you are a developer or an everyday user, there are plenty of places you can go to find help or have your questions answered.

Stripe Nonprofit Pricing and Discounts

Stripe offers nonprofits and 501(c)(3) organizations a special discounted rate on their transactions. Here’s what you get:

  • Discounted transaction rate of 2.2% plus 30¢ for all credit card donations
  • 3.5% transaction rate for American Express cards

To take advantage of Stripe’s nonprofit pricing, you’ll need to email and provide the following information:

  • Your EIN or a letter from the IRS confirming your 501(c)(3) status
  • The primary email address associated with your Stripe account
  • Confirmation that at least 80% of your payment volume will comprise of tax-deductible donations. Examples of non-eligible donations would include membership fees, ticket sales, registration fees and auction sales. 

Stripe is typically seen as the cheaper option because there are never any surprise costs, setup fees or monthly fees. There is a flat rate for each transaction, no matter the card (including American Express). International cards incur an additional 1% fee. 

PayPal Nonprofit Pricing and Discounts

Paypal is another payment processor that offers nonprofits and 501(c)(3) organizations discounts on transactions. Here’s what you get:

  • Discounted transaction rate of 2.2% plus 30¢ for all credit card, debit card and PayPal donations
  • No monthly fees

To receive the discounted charity rate, you need to be confirmed as a charity by PayPal. You can do so by:

  • Entering your EIN or providing documentation to verify your charity status
  • Providing a copy of your bank statement or a voided check for each bank account linked to your PayPal account

PayPal charges additional fees for customizing your checkout page, international transactions, currency conversions, American Express transactions and refunds. 

Integrate Your Favorite Nonprofit Payment Processor With Keela

Whether you go with PayPal or Stripe, you’re in good hands. They are two of the most regulated and reliable payment processors for nonprofits. And best of all, you can purchase either service at a nonprofit discount. 

Ultimately, the decision comes down to your needs and preferences. People generally choose Stripe if they’re looking for a quick and easy signup, thorough documentation and developer-friendly tools. PayPal users benefit from having a widely accepted and trusted payment form and easy setup process. 

Just take some time to determine what makes the most sense for your team, and what kind of payments you expect to be processing the most often.

No matter which payment processor you decide on, you can integrate both Stripe and PayPal with a nonprofit CRM like Keela to streamline your donation process. Keela helps you collect donations, membership fees and other transactions and deposits funds directly into your organization’s account. If you need help setting up the integrations, visit our Help Center to learn more about setting up Stripe for Keela or setting up PayPal for Keela.

We hope this information is useful as you decide on the best payment processor for your nonprofit!

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