You want to collect donations from your website with credit cards, but what does that really mean? What are the PayPal donation fees and how much does it really cost?
What is a payment gateway?
In order to collect donations from your website, you will need to be able to accept credit cards on your website. The tool used to process credit cards online is called a payment gateway.
In the past, you needed to set up a merchant account with your bank to accept credit cards — in person or online. Fortunately, those days are behind us. Payment gateways, like PayPal, have led the way for merchants and nonprofits alike to accept payment (donations) online. There are other payment gateways, too, like Stripe, Authorize.net, and GoCardless. Regardless of which payment gateway you choose to accept credit cards online, you will need a payment gateway and every payment gateway has an associated processing fee.
Why do you need a payment gateway?
As a nonprofit, you can always take offline donations (people mailing you checks or handing you cash). So, maybe you don’t need a payment gateway. But the good thing about a payment gateway like PayPal, Stripe, or 2Checkout is that they take on the security surrounding PCI compliance and, more importantly, assume the risk.
“Payment security is paramount for every merchant, financial institution or other entity that stores, processes or transmits cardholder data. The PCI Data Security Standards help protect the safety of that data. They set the operational and technical requirements for organizations accepting or processing payment transactions, and for software developers and manufacturers of applications and devices used in those transactions.” PCI Security Standards Council
“Payment gateways have been leading the way and pushing security.” Chris Teitzel of Lockr
How much are PayPal Donation Fees?
Payment gateways always have processing fees, the PayPal fee is just one of your options. The payment gateway transfers money to your nonprofit organization’s bank on your behalf. So how much are PayPal fees?
The short answer is that PayPal fees are thirty cents and 2.9% per transaction. If you’re an official nonprofit (meaning, you have the 501(c)(3) designation from the Internal Revenue Service), you can sign up for discounted PayPal fee rates.
“PayPal fees are always fair. Buying is free with us when you purchase in the U.S. When you sell with us, you get some of the most competitive rates in the business. It’s 2.9% + $0.30 per transaction.”
PayPal donation fees are discounted. PayPal for donations says,
“PayPal offers discounted transaction rates for 501(c)(3) charities for most products, and consistently low rates for all other nonprofits. No extra fees for setup, statements, withdrawals or cancellation. 2.2% + $0.30 per transaction and no monthly fee for charities.”
What is the breakdown on payment gateway fees?
PayPal is great and in many ways is a leader in the industry. But it’s not the only payment gateway. As a nonprofit, you have many options. Every payment gateway has their own set of fees and a few even have discounts for registered nonprofit organizations to take off some of the burdens of fundraising.
Here are a few of our favorite gateways and their associated fees:
- PayPal – 2.9% + 30¢ per transaction
- PayPal Pro – varies depending upon volume. $30 monthly plus a minimum of 2.9% + 30¢ per transaction
- Stripe – 2.9% + 30¢ per transaction
- Authorize.net – 2.9% + 30¢ per transaction plus $45 setup fee and $25 monthly.
- 2Checkout – pricing depends upon your country but is 2.9% + 30¢ per transaction for the United States
Meaning, does your fundraising platform take a commission in addition to the payment gateway processing fees? Most do. (Give doesn’t, with only one exception.)
Which payment gateways does Give support?
PayPal is the most widely known payment gateway as a brand, but by far not the only one. We have several payment gateways available for online donations. Currently, Give Core uses PayPal Standard for free — with no additional charge to you. So all you end up paying if you use the most basic software that Give has to offer is the PayPal fee. You also have the option to use Stripe in the free core plugin, but any donations processeed through Stripe will send us a 2% tranaction fee. This fee covers the support necessary for that particular feature of our software. When you purchase ANY Add-on from us, the fee is no longer applied.
If you choose to upgrade Give with the Fee Recovery add-on, you can reduce or even eliminate your credit card processing fees by asking your donors to cover the small extra cost.
Because many of our customers need options to meet the needs of their growing nonprofits, we also offer a variety of additional add-ons meant to maximize your fundraising efforts. These add-ons are available separately for a small annual fee that gives you access to updates and priority support. The payment gateways can also be purchased in a bundle for more overall value. Our Plus and Pro bundles come with Recurring Donations, which helps you to gain more sustainable donation income. To find a payment gateway that works with recurring donations, look for the symbol below on the payment gateway’s add-on page.
Our current list of payment gateways includes:
- PayPal Pro
- iATS Payments
- CC Avenue
- PayU Money
We are continuously adding new payment gateways, so be sure to bookmark this page.
Upgrade Your Payment Gateway
While you can use PayPal Standard with Give Core, we find it’s best to give your donors a more streamlined process by using a payment gateway that will not take them off-site.
Upgrading to PayPal Pro will allow your donors to complete their transaction right on your site. Similarly, Stripe will also allow for direct on-site donations with the option to enable Google Pay and Apple Pay as well. You can even ask your donors to cover the processing fees if you upgrade to a Plus or Pro Bundle with Fee Recovery!