Reviews

Nonprofit Credit Card Processors in 2021: The best options reviewed

January 10, 2021 Nonprofits Decoded Team
Nonprofit Payment Processing options

If you’re running a nonprofit, there are a myriad of options to consider when it comes to donor payment processing. From in-person fundraisers to online donations, there’s a variety of factors to carefully consider when signing up for a credit card processor.

Fortunately, there are quite a few nonprofit payment processors out there for you to choose from. That being said, they each come with their own pros and cons that you’ll want to carefully consider at your organization.

If you’re getting rather confused as to which one you should use for your charity then we’re here to shed some light on the matter by objectively analyzing some of the most popular credit card processors currently on the market.

In our review below, we look at four common payment processors (sometimes called a payment gateway) and evaluate based on their ease of use, integration with existing websites, payment processing fees and ability to integrate with other online donation tools.

Stripe

Payment processor Stripe logo

Stripe is a strong candidate whenever you’re choosing a credit card processor. It’s the second-largest processor in terms of market share next only to PayPal. Just because it doesn’t have as big of a stake in the payment processing industry, that doesn’t mean that it’s inferior. PayPal had more than 10 years worth of a headstart before Stripe entered the market and we’d still argue that the latter is a far better payment processor when you look at it from a nonprofit point of view.

Pros

There’s a lot to like about Stripe. It’s not as massive and widespread as PayPal but it tends to beat it in terms of actual performance. The first benefit that Stripe boasts is its superior customer support.

The fact that you can reach Stripe’s customer support department 24 hours a day, 7 days a week is a testament to the popularity of this platform. You can call them or even use the live chat feature which users have praised. It’s very rare to see a payment processor using a live chat to converse with their customers due to the fact that it puts a heavy burden on their operating costs, but it worked out for Stripe here.

Superior customer support isn’t the only thing that makes us so fond of Stripe though. Another feature that is very appropriate for nonprofits is the fact that it clears all bank withdrawals known as payouts on the platform within two days of being initiated, with even faster turnarounds available after account approval.

Other payment processors tend to be slower. PayPal lists its official time at three to five business days despite being the largest processor in the industry. You might not think that a few days makes a difference, but when you’re trying to change the world you want your funds to be available at a moment’s notice, and that’s just what Stripe helps you do.

Stripe is also one of the easiest nonprofit payment processors to integrate online, allowing a seamless connection with your online donation form, donor database and website. Many nonprofits will utilize Stripe through Gravity Forms on their WordPress website, but popular online fundraising tools also use the processor for their payment system.

Cons

One of the biggest cons that we can cover about Stripe is the fact that it can only be used if your business is registered in one of the 24 countries that the platform supports. That being said, you can’t really blame Stripe for falling behind in terms of global coverage seeing as it’s only a decade old.

It was founded in 2009 and has made great progress since then, but it still has a ways to go when it comes to supporting more nations. However, it does have a service known as Atlas that can help you register your business in the US and set up a bank account. This will allow you to use the platform like any other American company.

This can be a bit tricky for foreign charities though as getting certified as a nonprofit isn’t as easy and isn’t a part of the ATlas service. If you manage to get certified in the US and register the company then your nonprofit should have normal access to Stripe though. If the nonprofit you’re running is already based in the US then you won’t have to worry about a thing.

Pricing and Fees

While pricing isn’t everything, it’s always helpful to be familiar with the amount that your payment processor will take out of donations. This is especially true for nonprofits as you want to maximize your income so that you can make a lasting change for your cause and the world as a whole.

Stripe Checkout payment form
Example of Stripe Checkout payment process including Apple Pay.

The standard pricing of Stripe is just that, standard. Each transaction costs 2.9% + 30 cents much like PayPal. That being said, the international rates are far more forgiving than other payment processors at 3.9%. For comparison, PayPal charges 4.4% if the card being charged was registered outside the US.

Even if the donor lives in the US, you’ll still be hit with higher fees if their card was registered in another country which is something that you should consider when calculating fees. While the standard pricing of Stripe is nothing to brag about, it does offer lower rates for nonprofits which is a big plus if you’re looking to cut down on the fees associated with accepting credit card donations. If you want to avail of the discounts that Stripe offers then you’ll need to provide some provenance that you’re actually a legitimate nonprofit.

Your EIN is the main thing along with some other documents. It’s worth noting that the discounts only apply to nonprofits who process 80% or more of their total donations using Stripe. If you use Stripe as your sole credit card processor then you shouldn’t have an issue with proving that. However, if you use multiple processors then it might be a bit trickier to find the right documentation displaying 80% or greater usage of Stripe. That being said, it’s all worth it in the end when you get the lower rates.

PayPal

Payment processor Paypal logo

Well, we couldn’t really put a list of credit card processors together without talking about PayPal. After all, the company is generally referred to as the progenitor of all online credit card processors.

Funnily enough, the company struggled to secure funding in its early days and was turned down by several large investment firms. It’s not necessarily our favorite credit card processor due to the several shortcomings that it holds, but we’re fair enough to talk about some of the good things about the platform as well.

Pros

The biggest benefit of using PayPal is the element of trust. It’s always hard to convince people to enter their credit card information on an online website. While things like an SSL can increase your credibility, there are still some who are hesitant to do so after hearing about phishing horror stories from their friends.

Fortunately, PayPal can help you overcome these trust issues and get donations from even the most paranoid credit cardholders. Due to the fact that it’s one of the oldest payment processors getting its start before the turn of the millennium in 1998 it’s both widely used and a household name. Everyone knows that PayPal is a trustworthy payment processor that isn’t going to steal their credit card information.

Its widespread use also means that users won’t have any navigation problems when using the platform to checkout and process their donation because they likely already utilize PayPal to send payments. If most of your supporters are in the older demographic and thus aren’t very tech-savvy then using the simple and intuitive checkout system of PayPal to process their credit cards can avoid some of the obstacles that they might have encountered on newer platforms.

Cons

While the older age and widespread use of PayPal is definitely nothing to scoff at, there are several shortcomings that this credit card processor has especially when you look at things from the point of view of a charity. By far the biggest issue with PayPal is the fact that it has awful customer support.

If you have a problem with the platform then you’ll need to contact them through email to get in contact with a support agent. This can take up to 24 hours. You could also call them if you want to get a faster response but the wait time is generally rather long and they don’t even provide 24/7 service. If it’s a weekend or past business hours then you’ll be left to your own devices.

Paypal donation process
Example of PayPal’s checkout process for a donation.

Don’t even get us started on the support community as the information there is unreliable and can make the situation worse in some cases. It also isn’t as easy to integrate CRMs when you’re using PayPal rather than other payment processors. While this won’t impact nonprofits that don’t use donor databases or advanced reporting systems, it’s definitely something that you should take note of if you currently use a CRM or plan to use one in the future.

Paypal, also, is not a seamless experience for most organizations and donors. This means you’ll have to click through a screen with the Paypal logo and website to process a donation transaction. For some, this is an advantage, for others, it’s a downside.

Pricing and Fees

Like we mentioned earlier, the pricing of PayPal is equal to that of Stripe for all standard payments. The fee for every transaction will be 2.9% of the total amount + 30 cents. That being said, you’ll find that it’s a fair bit more expensive to use PayPal when you factor things in like international payments. Credit cards issued outside the US will be hit with a higher fee rate of 4.4%, and that’s not where the expensive nature of PayPal ends.

Just paying the standard rate is already more expensive than sticking with Stripe since you won’t be utilizing the nonprofit discount that the latter offers. While you might not think that sending in all the documentation to qualify for the discount is worth it right now, you’ll be glad that you did after saving money on your donations. Paypal is definitely a common choice for many profits just because it’s the most well-known credit card processor. However, if you’re looking for cheap pricing, PayPal isn’t exactly a stud in this regard.

Authorize.net

Payment processor Authorize.net logo

While you might not be familiar with Authorize.net, we’re sure that you’ve heard of the company that brought it to you, Visa. That’s right, the credit card giant has a processor, big surprise?

There are quite a few benefits to note when using this platform for all incoming donations. We’re going to take a look at some of the best things about Authorize.net, where it falls short, and the fee rates that you’ll have to deal with if you use it as your credit card processor.

Pros

This processor supports all the major credit cards that you could name. From Amex to MasterCard and even JCB, you’ll find that this processor won’t give you any problems. Did we mention that it also supports Visa credit cards?

If you’re put off by the fact that Stripe is younger than PayPal then you’re going to love Authorize.net due to the fact that it’s actually two years older than the latter being founded in 1996. While it may not be as famous as PayPal, it’s been around for a tad longer.

This means that you can trust it enough to not screw up in a royal fashion. Its anti-fraud features have stood the test of time and are being updated on a regular basis to keep up with the evolution of scammers as the years go by. If you’re worried about fraud and other related issues then using Authorize.net might be a great way to circumvent that.

After all, Visa has been a leader in cybersecurity ever since it got started in the online credit card processing industry. One of our favorite things about Authorize.net is the fact that it supports Apple Pay. This means that you can easily collect donations through an iOS app when you use Authorize.net as the primary credit card processor for your charity.

Cons

We mentioned that Stripe has some shortcomings when it comes to global coverage. You’d think that Visa wouldn’t have any problems with this seeing as they’re a very old company that has spent decades facilitating transfers between people from all around the world. That being said, as shocking as it may be, there are actually quite a few limitations when you use Authorize.net.

If you want to use it as a credit card processor for your nonprofit then you’ll need to be registered in Australia, Canada, the US, UK, or Europe. You might think that this is relatively far-reaching. However, there are quite a few charitable organizations that are based in the Caribbean due to the lower operating costs.

Pricing and Fees

Authorize.net has some of the highest card processing fees with many users having to pay a monthly maintenance fee along with the standard interchange charges of 2.9% + 30 cents.

Some local and regional banks, who promote and sell Authorize.net, can offer discounts on the fees, however, that require a more opaque process with your bank.

Braintree Payments

Payment processor Braintree logo

You might be wondering why a relatively obscure credit card processor is on this list and what the name means. Well, rest assured it has nothing to do with neurology nor botany.

Braintree Payments is actually a PayPal company that is specifically designed to make a nonprofit’s life a whole lot easier when it comes to online donations. It may seem rather unfair that we’re covering it separately, but it has a separate set of pros and cons so we figured that it deserves its own section on our article.

Pros

As you can imagine, some of the shortcomings that PayPal has when it comes to processing donations for charity are resolved in Braintree seeing as it was designed with digital organizations in mind. It isn’t perfect, but there are quite a few improvements to note.

For one, it accepts more payment options. While credit cards are all well and good, there are some times when a donor wants to make a donation using another payment method. This is where having a versatile credit card processor comes in as it will ensure that you don’t miss out on the donation.

Cons

One of the biggest cons about Braintree is the fact that you’ll need to enlist the help of a website developer if you plan on using the credit card processor for your nonprofit organization. That being said, it will be worth it in the long run since you won’t run into as many issues when using the credit card processor in comparison to using PayPal itself. There have also been some horror stories about Braintree in which accounts were closed and had their funds held.

These issues aren’t limited to for-profit businesses but can also strike charities. When you’re running a nonprofit that’s trying to make a change in the world then the last thing you want to be dealing with is frozen payments that you can’t spend on the cause. It also takes quite a while to set up an account with Braintree so if you want to get things up and running quickly perhaps in preparation for an upcoming fundraiser then it might not be the best option out there.

Pricing and Fees

For eligible nonprofits, Braintree is priced at 2.2% + 30 cents per transaction (or slightly higher for American Express cards), making it highly competitive with the others listed here.

Square

Payment processor Square logo

Square is a bit of a controversial choice when it comes to picking out a credit card processor for your nonprofit as most people think of it more as a point-of-sale solution.

That being said, it does have its merits despite some of the shortcomings so we decided to look at the credit card processor through an unbiased lens so that you could see whether or not it’s the right pick to handle nonprofit payment processing for your organization.

Pros

The great thing about Square is the fact that it features low and fixed rates for each swipe. You’ll only have to give up 2.75% of your donations in comparison to Square and PayPal’s 2.9% rate. 1.5% may not seem like a lot, but a little bit can go a long way when you’re looking at thousands of donations that are coming in.

Square credit card reader with an iPhone
Square’s credit card reader can be used at fundraising events to quickly accept donations.

You even get a free card reader when you use Square for your nonprofit which is a great bonus. You won’t have to deal with any monthly fees when using this credit card processor and there aren’t any contracts that you’ll need to sign making it a no-strings-attached endeavor for nonprofits. It can even accept offline payments making it perfect for emergency situations or developing nations in which a WiFi connection may not be an option.

Cons

You might be wondering how Square could be a controversial choice with all the benefits that this credit card processor has to offer. Sadly, there’s no such thing as perfect in our reality, and that rule holds true for Square.

While there are definitely quite a few pros to note, there are just as many cons that you should beware of before choosing Square as your credit card processor.

Unlike Stripe or Paypal, Square is more focused on in-person, making it the perfect compliment for say a golf tournament or event fundraiser. Some nonprofits will even use Square along with a separate online solution.

With that said, Square continues to make improvements to its web-based solution, making online donations possible, albeit some drawbacks when it comes to branding and design.

Conclusion

As you can see, there are quite a few options out there if you’re trying to find the right credit card processor for your nonprofit organization but not all of them will suit your needs. If you want to find the right pick for your organization then you should do your research on each one and see which option is up to par. It might take a while, but it’ll be more than worth it in the end and you can take that to the bank. Happy fundraising!


Common Questions / FAQs

Why do I need a payment processor?

A payment processor is essential if you plan to accept credit cards, debit cards or event ACH donations from donors to your organization. These companies, such as the ones listed above, allow you to connect your website, event registration system or membership system with your bank account to accept payment.

What type of payments should my nonprofit accept?

Most nonprofits organizations accept donations through credit cards, debit cards, check, cash and even ACH or Automated Clearing House, an electronic bank transfer.

Why is PCI compliance so important for nonprofit payment processing?

Payment Card Industry (or PCI) compliance ensures you’re protecting both the donor and your organization in an online transaction.

Being PCI compliant reassures donors and helps provide a trust symbol for online giving.

The steps to be PCI compliant vary by organization and how you’re donation processing system is set up. For example, Stripe can handle most of the PCI compliance for an online donation if integrated with Gravity Forms or other WordPress plugins.

Are online donations secure?

Yes and No. Online donations are only as secure as you make them.

This is why it’s important to make sure you’re website follows industry standards for payment processing, such as having a security certificate (known as an SSL) and you have a workflow in place for refunds or addressing donor issues.

Are there any free payment card processors for nonprofits?

Unfortunately, the only “free” donation options are cash and checks. All payment processors take a cut, whether it’s a flat fee or a percentage of the donation. So if you want to avoid fees, encourage your donors to send a check as their next gift!