A quick one here for those of you that do, or would like to, take payments by credit or debit card at a low cost for a low volume.
PayPal is an online payment system that almost everyone travelling the web is aware of at this stage. It allows people to pay for goods and services, make donations, pay repeated subscriptions either directly from their PayPal account or using a credit or debit card. This last option, it must be said, can be a little bit obscure. Linking to a payment from a web page or email will bring you to a page like the one shown. To pay by card, rather than a PayPal account, users need to click on the ‘Don’t have a PayPal account?’ link. It may be just me, but I usually have to scan for a few seconds to find what I’m looking for. There is a chance that potential donors may leave unfulfilled. (Click to enlarge the screenshot!)
That being said, unless your online payments are substantial, it is simply financially unfeasible to take them over the internet by having a merchant account; these often have a monthly fixed cost of hundreds of euro and per-transaction charges that are much higher than those offered by PayPal.
So, if you do want to use PayPal for online payments, and it’s a fairly simple process, then, as a registered charity, you can get a discounted rate on your transactions. PayPal’s transaction costs are on a sliding scale depending on your monthly turnover.
| Monthly Sales | Price Per Transaction | ||||
| €0.00 EUR – €2,500.00 EUR | 3.4% + €0.35 EUR | ||||
| €2,500.01 EUR – €10,000.00 EUR | 2.9% + €0.35 EUR | ||||
| €10,000.01 EUR – €50,000.00 EUR | 2.7% + €0.35 EUR | ||||
| €50,000.01 EUR – €100,000.00 EUR | 2.4% + €0.35 EUR | ||||
| > €100,000.00 EUR | 1.9% + €0.35 EUR | ||||
If you are approved for a charitable discount, you get the lowest rate of 1.9% of transaction plus €0.35 regardless of how much you turn over monthly. It’s not a huge amount – €7.50 saving on a €500 donation, but it’s better than nothing (you pay €9.85 versus €17.35 on such a donation).
If you would like to avail of the discount, then contact compliance@paypal.com and request a charitable discount on transaction charges. Here’s the list of information you will be asked for:
- If you are collecting donations as a charity or nonprofit organisation, your account’s nonprofit status must be confirmed. To begin the approval process, submit contact information, business URL, and a brief business summary to compliance@paypal.com;
- Evidence of tax-exempt status and/or registration with any applicable regulatory bodies governing your jurisdiction;
- A link to confirm the organisation’s registration status online (if applicable);
- A brief organisational summary or mission statement;
- Subordination letter from the parent organisation (if applicable);
- An authorisation letter on headed paper, signed by an official member of your organisation;
- A detailed explanation of how you’ll be using the PayPal account and what type of payments you’ll be processing;
- The exact documents required are based on the regulatory laws of your country. We’ll contact you if we need additional information.
As an alternative to PayPal, a newer and better option for web payments is Stripe. However, you’ll need to have https:// on your website and will need to have a web developer set it up. From there on, however, the price is even cheaper than the PayPal discounted rate 1.4% plus €0.25 for cards of European origin (if you’re in Europe?). Cards from outside Europe cost 2.9% plus €0.25 or plus $0.30 in the US.