One question we often get is, "Do I have to use PayPal as my payment processor when I sign up to use your service?" We address this question on our F.A.Q. page, but the short answer is no. In this post we will explain the pros and cons of using PayPal, Gnosis Media Group, or an alternate third-party donation processor.
Pros of Using PayPal
While you do not have to use PayPal as your payment processor, there are some advantages to using PayPal:
PayPal's fulfillment rates are typically higher than other processors.
PayPal is the most widely used digital wallet in the U.S., which means more of your prospective donors will already be using it. This makes PayPal checkout faster than most other processors.
When you use PayPal, we can track which donations come in through our shortcode. We cannot do this with all payment processors.
PayPal has the lowest transaction fees for nonprofits, at 2.2% +$0.30 per donation.
Cons of Using PayPal
There are a few areas where PayPal lacks:
PayPal only gives donors the option to input the amount they want to donate or pre-populate the amount. It does not, for example, give you the option to show multiple payment amounts. UPDATE 12/16/2018: PayPal now does offer the option to offer multiple donation amounts to your donors.
PayPal offers limited customization. You cannot easily ask for additional information such as address or mobile phone number through a donate button or link. Often PayPal requires complex development to customize the checkout experience. Many nonprofits don't have these development resources on staff.
You cannot customize the email notifications or receipts that come from PayPal very easily.
What About Using GMG as a Payment Processor?
You always have the option of using us as your payment processor. Some advantages of using us (as opposed to PayPal) include:
We offer a high level of customization. With us, you can customize your entire checkout experience. You can add your logo to your checkout page, customize the form copy, customize the amounts, and even customize the confirmation emails that are sent to the donor on successful completion.
You can request pretty much any donor info you would like, such as mobile phone number, city, state, or address.
Since you can request mobile phone number, using us means we can match the donor receipt to the donor's mobile phone number. With PayPal, we can only give you the donor mobile phone number, but we have no way of knowing which phone number goes to which donor, as donations do not pass through us.
When you use us as a payment processor, your donations pass through us. This means that, not only can we tell you how many subscribers you've received, we can also tell you how much in donations you've received through our platform. We cannot do this when you use PayPal or another processor.
As with all payment processors, there are some disadvantages to using us:
We charge a 6% transaction fee on all donations processed. This is to offset the merchant fees associated with processing donor credit/debit card payments.
Donors must use a debit/credit card to donate, unlike Paypal, where they can often sign in and draw from their existing PayPal balance, never having to enter card details.
Our payment form is longer and requires more steps to complete than PayPal's. This may increase abandonment rates.
It will generally take longer to get your funds using us than it will if you use PayPal. We disburse funds via check within 15 days of receipt, whereas PayPal deposits your funds usually within 5 business days.
The main draw with us is customization and availability. Nonprofits use us when they require a higher level of customization than what PayPal provides. Also, newer nonprofits who do not yet have their own payment processor can get up and running fast with us, without having to set up their own merchant account.
What About Using A Processor Other than PayPal or GMG?
There are a plethora of donation payment processors on the market. One great feature of our service is that you are free to use pretty much any payment processor you like; we can integrate with any of them. Additionally, other payment processors may offer features that PayPal or we don't, such as integration with your CRM. However, there are some downsides to using a processor other than PayPal or us:
We cannot tell you which donations came through our system. With PayPal, we can embed a unique ID into each donation receipt. This shows you which donations came through your keyword and short code. But with other payment processors, we cannot do this.
Most other payment processors (including us) have higher fees than PayPal.
Customization: You will have varying degrees of customization with other third-party processors. Some will give you no customization at all.
Mobile friendliness: Not all payment processors are as mobile friendly as PayPal or us. You need to ensure that the checkout experience you provide to donors is mobile-friendly, easy to navigate, fast-loading, and easy to read. Nothing kills conversion rate more than a poor mobile experience.
There is a lot to consider when choosing your donation payment processor. You will want to determine which features are "must-haves" and which are "nice-to-haves" when making this decision. Each payment processor has its pros and cons, and in the end you'll have to decide which one best meets your fundraising needs.