Stripe vs. PayPal for Nonprofits

If you are contemplating doing online fundraising then there are some things to be careful of, especially when it comes to the payment gateway you select to drive your efforts. Stripe vs. PayPal is two heavyweights in this area.

You can choose from these platforms and it will impact on your success and ease of running your fundraising campaigns. Today we’ll take a look at Stripe vs. PayPal feature, security, and user friendliness comparison to assist you with selecting the first steps towards a launching your own nonprofit.

Stripe for Nonprofits

Stripe also has a very similar option to PayPal on paper. With this billing platform they allow you to receive donations through your website and to pay off with credit cards or local payments. However, just be aware that Stripe is only available in about 45 countries at the moment. Stripe, however, has a few advantages over PayPal when it comes to being used by nonprofits.

The first is to set up Stripe payment forms to accept payments without users having to leave your site. What this means is that you have full control over the payment experience. If there are any errors during the process, you can access that data.

Stripe nonprofit pricing and hosted payment pages (PayPal alternative)

For developers, Stripe has a lot of user-friendly resources to create on page payment forms. Yet, you might still require someone to help in creating Stripe payment forms. That can cost hundreds or thousands of dollars in development costs. That’s a lot for a small business or charity.

Using the Stripe Payments plugin for Formidable Forms is better. With this tool, you can build payment forms using the Formidable Forms builder. The great formidable drag and drop builder is available to you. Also, there are dozens of ready to go add-ons that you can use to customize your payment or donation forms.

Formidable Forms allows you to provide users with the option to give one time or recurring donations. The reason is that you can design custom payment workflows to provide you with full control over the payment experience. Additionally, you can make it happen without any web development background.

Stripe for Nonprofits form settings

Stripe charges a discounted rate for nonprofit rates. The rates are not publicly available at the moment, but in the past, they were 2.2% + $0.30 per transaction.

That said, transaction fees are mostly dependent on the method of payment. For instance, Stripe ACH payments see some of the lowest fees, as you only pay 0.8% for direct debits.

Stripe is much more transparent about what it needs for special rates. However, to get Stripe nonprofit rates, you will need to contact customer support. If your organization is in the USA, provide the EIN or documentation from IRS as Proof of status of your organization as 501(c).

Stripe Donation Pros

• Stripe is well known as a transparent developer-friendly system with a well-documented API and SDKs which makes it easy to integrate.
• Transactions are supported in many countries and currencies by Stripe.
• Recurring donations or subscription-based campaigns are the applications of this tool.
• Supports Recurring Donations.

Stripe Donation Cons

• It may be less friendly for non-developers when it comes to the backend interface.
• Fees can take a couple of days to transfer funds to your bank account depending on which country you are located.

PayPal for Nonprofits

The advantage of using PayPal is that it is very easy to integrate with WordPress. It is also available in over 200 countries. This is true irrespective of the fact that you are running an online store or a charity. There are several ways to process payments for your nonprofit with PayPal.

The first option is to create a ‘donation’ button. With this feature, you can set up possible donation amounts. Then, visitors can pay with money from their PayPal account, bank account, or with credit/debit cards.

PayPal donation button for nonprofits

Additionally, there are a number of plugins that will allow you to set up PayPal payment forms for your site. To create custom donation forms, you can use a PayPal Payments plugin provided by Formidable Forms. They can contain any combination of fields that you want to use.

A WordPress PayPal donations form

PayPal charges a standard cost per transaction of 2.9% + $0.49 but this can vary based on currency, transaction amount and transaction type.

This processing fee is a bit more expensive than industry standards for eCommerce transactions. Nonprofits can usually get discounted fees, however. Special charity fees are advertised at 1.99% + $0.49 per transaction and no monthly fees by PayPal. But it doesn’t say what the verification process is for nonprofits.

However, PayPal is a flexible payment option, but is also very prone to errors with minimal returns. If you set up PayPal for a nonprofit organization, users will have to leave your site to make their payments. The PayPal website will be presented to any payment form you set up, and donors will be directed there. When they get there, they’ll see a checkout page over which you have little control.

PayPal order forms may be an easy solution for nonprofits. While it may not be the best option for ease of use and customer service, however, it is. If you intend to accept PayPal payments, we suggest you add another payment option.

PayPal Donation Pros

• Users trust PayPal and are aware of it, which can result in more donor confidence.
• PayPal also easy to set up a fundraising campaign, which means that it’s easy for non tech savvy users.
• Another feature is that donors and fundraisers get added protection from unauthorized transactions.
• Supports recurring donations

PayPal Donation Cons

• For international transactions, PayPal’s fees can be relatively higher.
• New accounts or certain transactions may be subject to holds by PayPal.

Stripe vs. PayPal: Key Features and Services

PayPal and Stripe are similar, but they are better for different business needs. In this, we’ll look a little closer at important features and determine a winner in each.

1. Fees and Pricing

The first things you should think about when you are about to buy a new software or service for your business is how much is it going to cost.

Transaction fees

Stripe and PayPal both have a transaction fee-based pricing model. Both of them charge the same fees per transaction, 2.9% + $0.30 US per transaction, and that flat rate is the same no matter which card your customers use.

Neither will charge you monthly fees, minimums or interchange costs. Instead, you just have the cut taken off each sale that you processed using their gateway.

Micropayments

Micropayments are online transactions under $10. While Stripe charges the same fixed fee for micropayments as it does for regular payments (2.9% +$0.30), PayPal’s micropayment rates are 5% + $0.05 per transaction.

Chargeback fees

When a customer contacts their bank and disputes a transaction on their card that they don’t agree with, or that they, for some reason, suspect is fraud, your business is charged a fee. To pay these fees, the chargeback fee, the chargeback is funds that your business pays back to the customer’s bank. Chargeback fee of Stripe is $15 while PayPal chargeback fee is $20.

Chargebacks are created to protect cardholders from fraud, but some customers abuse them to get a refund. The charges from these will start adding up for your business because you will be billed for each chargeback that happens.

WINNER: Stripe

The two are close, but Stripe is cheaper than PayPal for most merchants. Though the fees might not seem like a big deal, the difference between them and saas is going to add up very quickly, particularly if you have a smaller business with a bigger inventory turnover.

2. Acceptable Payment types

You can accept every major credit card and debit card on your website through PayPal. In the US, customers can also pay with PayPal Credit, a virtual line of credit available to customers with a PayPal account that doesn’t require linking to a bank account.

However, Stripe supports a wide range of payment types. They accept every significant credit and debit card, as well as the following wallets:

• Alipay
• Apple Pay
• Google Pay
• American Express Checkout
• Microsoft Pay
• Masterpass by Mastercard
• Visa Checkout
• WeChat

Stripe is especially valuable because Visa and MasterCard claim about 64.3% of the global card market.

If you wonder why there is a variety of payment options option instead of just one, here is a reason to believe – big boost for online stores because the more options your customer can pay, the more chances your conversion will be improved.

WINNER: Stripe

Having PayPal available to customers to use on your website is a huge benefit, as PayPal has more customers than Stripe. However, Stripe is ahead of PayPal because it includes wallets and extended card networks, which provides customers with more payment options and more flexibility.

3. Security

When selecting a payment platform, security should be top of mind as payment processing companies handle customers’ personal details and payment information.

Stripe and PayPal are both PCI compliant, so they follow Payment Card Industry’s strict technical and operational standards regarding credit card data security.

But Stripe Radar (a separate product with its own fees, 05¢ per transaction) takes Stripe’s security system a step further. Machine learning technology is used by radar to detect and blocking suspect payments in real time.

WINNER: Stripe

Both payment solutions are very secure, but Radar wins out when it comes to businesses who want an extra layer of protection against fraudulent activity.

4. International Transactions

If your business is involved with business overseas or accepts international payments, then you’ll need to check out the countries and currencies PayPal and Stripe support.

Currently, PayPal is available in over 200 countries and supports 25 currencies whereas Stripe can process more than 135 currencies but is available in only 47 countries so far.

WINNER: Tie

Which is most important to your business will determine who the winner of this category will be. For instance, do you wish to reach more countries or different currencies?

5. Integrations

They have hundreds of third-party tools that you can integrate with your payment provider to expand its functionality.

There are more than 610 integrations for Stripe including HubSpot, Slack, Zapier, and Google Drive.

While PayPal has fewer integrations (more than 500) it still offers a large range of options including integrations with Shopify, WooCommerce and GoDaddy.

WINNER: Stripe

Stripe has more custom integrations than PayPal, but both have basic integrations.

6. Ease of Use

It is very easy to set up and use PayPal. Its integration with a website or an eCommerce platform doesn’t require you to be tech savvy and there is not much coding involved.

However, Stripe has robust developer tools and a powerful API for bespoke services or more complex integrations that makes it more complicated and technical to use.

WINNER: PayPal

Setting up PayPal is minimal and the use is simple. To work with Stripe, you’ll probably be using coding skills or will be working with a developer.

7. Customer support

Whatever you do, technical related issues play havoc with your bottom line and you require a payment gateway that will give you plenty of support when you want it.

It is 24/7 and can be reached over phone and live chat on the Stripe website. Moreover, users can also seek help through email or independently search for solutions in the company’s knowledge base.

However, PayPal also provides customer support through phone, but not 24/7. In addition, PayPal merchants can get help through live chat, email, on PayPal’s knowledge base, or ask questions in PayPal’s community forum. The platform also provides social media support on its @AskPayPal Twitter account with representatives available Monday through Friday from 9 am to 5 pm CST to answer questions.

WINNER: Stripe

Stripe provides around the clock chat and phone support while PayPal’s team is only available from Monday to Friday between 8:00 a.m. and 8:00 p.m. Central time. That’s why Stripe is more attractive than PayPal for customer support.

PayPal vs Stripe for Nonprofits

All in all, Stripe is a much better way to collect payments as a nonprofit. Stripe account provides hosted payment forms, so that customers can pay without ever leaving your site.

There are plenty of payment gateways on top of that. Additionally, its nonprofit fees are much more competitive than PayPal’s.

Stripe nonprofit pricing: 2.2% + $0.30 per transaction (no information on nonprofit fees is publicly available). PayPal nonprofit pricing: 1.99% + $0.49 per transaction

Setting up a donation form or button is a much easier thing to do with PayPal than it is with Stripe. If you use Stripe, you may require a WordPress developer to set up nonprofit payment forms. But you can easily avoid this problem with Formidable Forms for your online donation forms. You have the full control of the whole payment process; supporters are not required to leave the website of you in order to make a donation.