PayPal Donation vs Payment: Difference and Comparison

PayPal refers to a financial service provider enabling us to pay and receive funds from anyone worldwide online.

At present, there are over 325 million accounts that trust PayPal and use its services regularly.

Established in 1998, it has been accredited with over 20 awards for its excellent services. It serves in 25 currencies and 202 countries worldwide.

Key Takeaways

  1. PayPal Donations are specifically for nonprofit organizations, while PayPal Payments can be used for personal or business transactions.
  2. PayPal Donations have lower transaction fees than Payments, which can benefit nonprofit organizations.
  3. PayPal Donations offer additional features, such as fundraising tools and donor tracking, which are unavailable in standard Payments.

PayPal Donation vs Payment

PayPal Donation allows individuals and organizations to receive donations online from other users. Non-profit organizations, charnonprofit individuals use this feature. PayPal Payment allows individuals and businesses to send and receive payments for goods and services. PayPal Payment is commonly used for online shopping, e-commerce, and peer-to-peer transactions.

PayPal Donation vs Payment

PayPal Donation is a feature that allows not-for-profit organizations to use a donation plugin on their web page.

They can make PayPal one of the payment gateways to receive donations through a secure and safe transaction.

Additionally, they can retain donors and increase funds through the recurring transactions feature of PayPal donations.

PayPal enables its customers to make online payments via an array of methods such as bank account, rewards balance, PayPal balance, PayPal Credit, credit or debit cards, etc.

One can pay their close ones in the U.S.A for free using their bank account or Paypal balance.

The best part about buying goods through this is the PayPal Purchase Protection which acts as insurance for these goods.

Comparison Table

Parameters of ComparisonPayPal DonationPayPal Payment
Recurring paymentsAvailableNot available
Processing fees(Domestic)2.2%+0.30 per domestic transaction2.9%+.30 per U.S transaction
International fees chargedAddition of 1.5% to the domestic feesNon-profit organizations and their donors
Pay LaterNot availableAvailable
Prospective usersNon- profit organizations and their donorsSellers, buyers, individuals, etc.

What is PayPal Donation?

Often funds received offline are insufficient for not-for-profit organizations. They need to turn to online payments to increase donors. That’s where PayPal Donation comes into the picture.

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Automatic fraud screening offers these organisations a secure and safe option to increase their reach at a reduced fee. Some of the opportunities provided by PayPal are as follows:

  • PayPal Donate Button: By choosing the payment gateway, organizations can easily accept donations through debit cards, PayPal payments, and credit cards. The lack of necessity of a PayPal account helps in expanding reach.
  • PayPal Here: This is the perfect app to raise donations in person or sell items for fundraising. With this, one can accept donations in all forms, even on smartphones, at a fee as low as 2.7%.
  • PayPal.Me: The organization can send a customized PayPal.Me link to prospective donors. This can also be added to their web page.
  • PayPal Giving Fund: This is the best part about using PayPal for non-profit organizations.
  • By enrolling in the fund, organizations can open their doors to various donors across platforms such as eBay, PayPal, etc. Donation reports, aggregated donations, etc, are also provided for the program.

Moreover, the donate button is highly customizable in terms of size, the addition of logos, photos, etc. Thus, using PayPal for non-profit organizations is a boon.

Over the last year, more than 500,000 organizations received funds via PayPal.

What is PayPal Payment?

One of the market leaders in the digital payment world, PayPal has more than 360 million users who actively use it to make payments.

It has revolutionized how to buy items, with the option to pay online directly with one’s bank account.

While buying goods, it acts as a middleman between buyer and seller, enabling us to buy our desired products hassle-free. Some of the ways of using PayPal Payment are:

  • One can purchase goods securely from the participating stores with PayPal payment after linking their bank account with PayPal.
  • One can also send money safely to their near and dear ones. This is the most common use of PayPal.

The best part about buying goods through PayPal is the safety feature. With PayPal as the online payment medium, one can be sure their card information will not be shared with the merchant.

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With features like end-to-end encryption, email confirmations, etc., PayPal puts security at the forefront.

It is the fifth most used payment option, available at countless online stores. While using this, one does not need to retype their card numbers. We can buy goods seamlessly.

For purchases not requiring any conversion of currency, no fees are charged.

However, for sending money to people via cards, PayPal charges 2.9% for domestic and 5% for international payments, along with a fixed fee.

Main Differences Between PayPal Donation and Payment

  1. PayPal Donation is not as developed as PayPal Payment. The former lacks several essential features for non-profit organizations, such as crowdfunding, event registration, text-to-give, wealth screening, etc.
  2. The processing fees for domestic transactions are much less in the case of PayPal Donation when compared to PayPal Payment while using cards for transactions.
  3. The processing fees for international transactions are much less in PayPal Donation when compared to PayPal payments.
  4. The pay Later feature is not available in PayPal Donation while it is available for PayPal payment.
  5. Prospective users of PayPal Donation are non-profit organizations and their donors, while PayPal Payment is used by sellers, individuals, buyers, etc.
References
  1. https://www.sciencedirect.com/science/article/pii/S1567422316300357
  2. https://link.springer.com/chapter/10.1007/978-1-4302-0353-7_1

Last Updated : 13 July, 2023

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6 thoughts on “PayPal Donation vs Payment: Difference and Comparison”

  1. While PayPal Payments are great for online purchases, the PayPal Donation system has the potential to positively impact countless non-profit organizations. Truly remarkable.

    Reply
  2. It’s clear how PayPal is providing services that cater to both the business world and non-profit organizations. Their diverse offerings and global reach are commendable.

    Reply
  3. The PayPal Payment system is a great way to ensure secure transactions for online purchases. It’s indeed a reliable service.

    Reply
  4. The comparison provided about PayPal Donation and Payment gives a clear picture of the differences and how they cater to distinct user groups. Well presented.

    Reply
  5. It’s interesting to see how PayPal has evolved from just a payment service to provide specific features for non-profit organizations to handle donations. A great move by PayPal.

    Reply
  6. The PayPal Donation system offers many benefits over PayPal Payment for non-profit organizations, such as lower transaction fees and additional features.

    Reply

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