PayPal refers to a financial service provider that enables us to pay and receive funds from anyone across the world 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 more than 20 awards for its excellent services. It serves in 25 currencies and 202 countries worldwide.
PayPal Donation vs Payment
The main difference between PayPal donation and payment is the fees charged by PayPal for both. While using the donation feature, fees charged by PayPal are much less than that charged by it for general payments. There’s a difference of 0.7% for domestic payments and donations while for the international fees, there’s a difference of 3.5%. Thus, non-profits can save more on fees while using PayPal Donation.
PayPal Donation is a feature of PayPal wherein it 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 donation.
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 by 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 Between PayPal Donation and Payment
| Parameters of Comparison | PayPal Donation | PayPal Payment |
| Recurring payments | Available | Not available |
| Processing fees(Domestic) | 2.2%+0.30 per domestic transaction | 2.9%+.30 per U.S transaction |
| International fees charged | Addition of 1.5% to the domestic fees | 5%+2.9% and additional fees while using a card |
| Pay Later | Not available | Available |
| Prospective users | Non- profit organizations and their donors | Sellers, 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. With automatic fraud screening, it offers a secure and safe option to these organizations to increase their reach at a reduced fee. Some of the options offered by PayPal are as follows:
- PayPal Donate Button: By choosing PayPal as 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 their 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 themselves in the fund, organizations can open their doors to a variety of donors across various platforms such as eBay, PayPal, etc. Donation reports, aggregates 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. In the last year itself, more than 500,000 organizations had 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 the way of buying items, with the option to pay online directly with one’s bank accounts. 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 medium of online payment, one can be sure that their card’s information will not be shared with the merchant. With features like end-to-end encryption, email confirmations, etc, PayPal puts security at the forefront.
It is presently the fifth most used payment option, available at countless stores online. 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
- PayPal Donation is not as developed as PayPal Payment. The former lacks several essential features for use by non-profit organizations such as crowdfunding, event registration, text-to-give, wealth screening, etc.
- 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.
- The processing fees for international transactions are much less in PayPal Donation when compared to PayPal payment.
- Pay Later feature is not available in PayPal Donation while it is available for PayPal payment.
- Prospective users of PayPal Donation are a nonprofit organization and their donors while PayPal Payment is used by sellers, individuals, buyers, etc.
Conclusion
Thus, PayPal Donation and PayPal Payment are two different ways in which PayPal can be used. These distinct features differ from each other in terms of fees, users, etc. Though PayPal donation needs a lot of other features, nonprofits prefer it because it is a safe and secure portal for receiving donations seamlessly. On the other hand, PayPal payments offer a variety of features to its users which is a major reason why people prefer it over others to make payments.
References
- https://www.sciencedirect.com/science/article/pii/S1567422316300357
- https://link.springer.com/chapter/10.1007/978-1-4302-0353-7_1