How to Choose the Right Nonprofit Payment Processing Platform

Every fundraiser’s goal is to find a sustainable medium for raising money and nurturing donor relationships. And with the rise in digital payment methods and online transactions over the past decade, online donations have become an essential source of revenue for nonprofits worldwide. 

Charity organizations need safe, secure, and credible nonprofit payment processing to accept online donations and monitor their digital transactions. This article explores and compares the best payment processing options available to nonprofits and shares tips on how organizations can choose the right payment processor. 

What is a Nonprofit Payment Processor?

A nonprofit payment processor is a tool used to collect donors’ financial information when they make a contribution online. The information, usually collected via a donation form, is used to finalize transactions and ensure that the donations go through. 

Think of a payment processor as a middle person between your nonprofit and donors when a contribution is being made. This middle person allows you to process multiple transactions simultaneously and ensures each transaction is completed promptly. 

Your nonprofit payment processor offers you a low risk of theft and scams. Traditional methods of donations, such as cash and cheques, can easily get into the wrong hands and be manipulated. A secure payment processing system will keep your donations safe and your mind at rest. 

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Which Payment Processing Tool is Best for Nonprofits?

There are several payment processing options available to nonprofit organizations, and each of them has its advantages, unique features, and limitations. You can find a comprehensive list of options here, but PayPal and Stripe are the most popular payment processors for nonprofits. 

1. Paypal 

PayPal is an excellent payment processing tool for new and small nonprofit organizations, especially if most of their donors are based in North America. This tool allows you to add and customize a donate button on your website so donors can make secure contributions using credit cards, ACH Direct Debit payments, and digital wallets. 

Donors making payments via Paypal will need to do so through their PayPal account. This requires an additional step on the donor’s part and may result in the donor abandoning the donation. Nevertheless, so many resources are available for donors who choose to make contributions via Paypal. 

PayPal’s Pricing for Nonprofits

PayPal charges 2.9% + $0.49 per transaction, but eligible 501(c)3 organizations may qualify for reduced rates.

2. Stripe

Stripe is one of the most popular payment processors worldwide. Its reach extends to 47 countries, meaning you can accept donations via Stripe from several parts of the world. These donations can be made using major credit cards and ACH Direct Debit payments. However, Stripe is also making plans to support cryptocurrency transactions. 

Nonprofits can use Stripe’s API to integrate this payment processor with their CRM to accept donations. 

Stripe’s Pricing for Nonprofits

Stripe charges a 2.9% + $0.30 fee for each credit or debit transaction, but eligible nonprofits may qualify for discounted processing fees. ACH Direct Debit payments are 0.80% and up to $5 per transaction. 

What to Look for When Choosing a Payment Processor for Your Nonprofit

Choosing a nonprofit payment processor can be a challenging decision to make. You want a payment processing tool that is safe, secure, and convenient for your donors. You don’t want a tool that glitches often and discourages donors from making timely payments and contributions. 

These payment processing tools we’ve discussed are more than capable of meeting these requirements and should help you narrow down your options. But if you’re wondering how they stacked up against each other, here are four features to consider when deciding on your nonprofit payment processor:

1. Security

Data thieves and cybercrimes have evolved over the years. Hackers are always looking for innovative ways to sabotage tools and technologies that organizations have employed to protect their donor data. It’s essential to have a secure payment processor that reduces the risk of fraud and data theft. 

When choosing a payment processor for your nonprofit, one thing to look out for is if that tool is PCI-compliant. The Payment Card Industry Data Security Standards (PCI DSS) have created guidelines and policies that payment merchants have to adhere to meet the required data encryption and security standards. 

Your nonprofit payment processor needs to have a PCI certificate. The payment processing systems used by Stripe and Paypal have been certified to PCI Service Provider Level 1. Stripe features advanced fraud monitoring and chargeback protection, and PayPal has automatic fraud screening to protect you and your donors.

2. Ease of Use

You want to choose a payment processor that is simple enough for your nonprofit organization to implement and manage and easy for donors to make payments. 

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 touchpoints. If you’re not tech-savvy or prefer to keep the setup process simple, PayPal may be a less stressful option. 

PayPal makes it very easy for anyone to set up and start accepting payments with little to no coding experience (although it offers developer tools if you need them). You can integrate with third-party eCommerce platforms, like Shopify, which has headless commerce capabilities, for an easy setup or create a custom site with payment or donation buttons.

So, if you’re looking for payment processors that are easy to set up and manage, PayPal is probably your best option.

3. Processing Fees

Payment processing fees are the costs that nonprofits incur when donors make contributions through a payment processing tool. Many nonprofits like to give donors the option to cover these fees, and with Keela Forms, you can do this easily. Doing so will help your organization save money and get the most out of each donation. 

The processing fees for nonprofit payment processors differ. PayPal charges 2.9% + $0.49 per transaction, and Stripe charges a 2.9% + $0.30 fee for each credit or debit transaction. 

Nonprofit organizations may be eligible to get a discounted rate for Stripe and PayPal.

4. In-House Support

There’s nothing like knowing the team behind the product your organization uses can support you when you need it most. This is something that Keela prides itself on; our customer care team provides world-class support, premium care, and continuous learning opportunities so your nonprofit can get the most out of Keela’s products and services. 

Our care team offers free unlimited email support, an online knowledge base, and complementary data review services. With our premium care package, you can enjoy even more support with in-app live chat, scheduled phone support, and monthly training sessions. 

PayPal and Stripe also offer support through multiple channels. PayPal users can get support through their Help Center, community forum, live chat, email, and phone support. Similarly, Stripe users can contact the support team via email, live chat, and phone support or learn more about the product via the Help Center and Developer Documentation. 

Enhance Your Donors’ Giving Experience

Research shows that 6 out of 10 donors will leave a donation form without completing their donation. There are several reasons for this, ranging from unnecessarily long donation forms to incompatibility issues with mobile devices. But at the center of it, all is the reality that nonprofits need to simplify the process of making donations. 

Your choice of a payment processor matters and will determine how easy it is for donors to contribute to your nonprofit organization. You need payment processors that enhance your donors’ overall giving experience while simplifying your organization's payment management and reporting process. 

Keela has supported nonprofit organizations worldwide to raise more than $2 billion. By taking advantage of the seamless integration between Keela CRM and Keela Forms, you can ensure that your team benefits from all the best that Keela has to offer.