Square vs. PayPal for Nonprofits: A Comprehensive Comparison Guide

Choosing the right payment processing software is crucial for maximizing donations and streamlining operations. Two of the most popular options on the market are Square and PayPal, each offering a unique set of features and benefits. But which one is the best fit for your organization?

In this comprehensive comparison guide, we'll examine Square and PayPal's pros and cons, their core features, pricing structures, integrations, and customer support. ‍

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Square vs. PayPal Highlights

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Square: Best For In-Person Transactions

Square is one of the popular platforms to process payments for nonprofit organizations of all sizes. 

Its various hardware options, including a mobile card reader, POS system and application, and magstripe, facilitate contactless payments anywhere through your smartphone or tablet. 

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Pros of using Square

• Square payment service is quick and accessible for next-business-day transactions.

• Offers free credit card payment hardware with no up-front costs.

• Provides multiple hardware options like Square Register, Square Terminal, and Square Stand.

• Features customer engagement software to enhance donations.

• Square Analytics provides important financial reports related to funds raised and donations.

• Integrations for social media, payroll, donor engagement, online stores, and more are available. 

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Cons of using Square

• Customer support needs to improve response and resolution time.

• While Square offers dedicated versions for specific industries, it hardly offers anything for nonprofit organizations. 

• Square POS hardware is pretty expensive to invest in.

• Square does not offer any discounts and is chargeable for nonprofits.

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PayPal: Best For E-commerce and to Accept Online Payments 

PayPal is a trusted and widely recognizable brand that accepts online payments and is popular among small businesses. While not specifically designed for nonprofits, it offers various fundraising tools, from adding a donate button to your website to creating an advanced and customized donation process to a custom PayPal Me Link. 

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Pros of using PayPal

• Accepts online payments from around the world in multiple currencies. 

• Robust security measures offer various levels of security and payment information protection.

• Options for donors and supporters to set up recurring donations. 

• A simple setup and user-friendly interface make it easily accessible for both nonprofits and donors. 

• Access to detailed transaction reports and built-in marketing and fundraising tools like a donate button. 

• Offers tools and services to support points of sales, online stores, e-commerce, and subscription-based transactions.

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Cons of using PayPal

• PayPal charges donation fees, and your nonprofit gets only $97.52 for every $100 donated. 

• There are account freezing and funds holding issues alongside inconsistent customer and phone support.

• The platform is not specifically designed for nonprofit organizations. 

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Square Vs. PayPal: A Comparison of Their Features  

1. Setup and Use 

Square:  

The Square app and dashboard are intuitive and designed for small business owners. The setup process is guided, making it simple for users to configure their settings.

Hardware integrations are typically plug-and-play, which means nonprofits can start accepting donation payments with Square almost immediately. 

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PayPal: 

As with Square, the signup process is pretty simple, but you need to register as a nonprofit organization and become a PayPal-confirmed charity to access discounted fees for charitable organizations.

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PayPal offers various setup options, including PayPal donate buttons for websites or forms, Zettle, formerly known as PayPal Here, for in-person, PayPal Payments Pro for a fully customized and branded donation process, and PayPal Checkout for e-commerce.

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2. Hardware 

Square: 

Square designs and produces its hardware solutions to accept payments.

• Square Reader: ‍Connects to tablet or smartphone via Bluetooth, allowing you to accept funds from anywhere. The first reader is free with sign-up but only allows you to swipe magnetic stripe cards. You use Square's POS systems for contactless and chip payments, which are available at $49.

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• Square Terminal: ‍This virtual terminal device uses Bluetooth and accepts cards via tap, swipe, and insertion for even more functionality. It is available for $299 and prints receipts.

• Square POS Register: ‍This register accepts all major credit cards by inserting, tapping, or swiping. It can be used standalone or with accessories like the receipt printer, handheld scanner, and cash box. The register costs $799 or $30 for 24 months. 

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PayPal: 

PayPal offers the following hardware options for accepting payments:

• Zettle Card Reader:‍ Wireless accepts tapped, chipped, and swiped cards. Contactless digital wallets like Apple Pay and Google Pay. Numeric PIN pad for debit card transactions. PayPal charges $29 for the Zettle card reader, and the additional units cost $79 each.

• All-in-one Terminal: The PayPal app is built right in, updates inventory, and checks stocks aside from accepting payments.

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3. Integrations 

Square: 

Square integrates with hundreds of applications, around 350 to be exact. These include Mailchimp for email marketing, Gift Up to create gift cards, Tap Mango for marketing and loyalty, and ZipRecruiter for hiring. Other services include QuickBooks, Xero, GoDaddy, WooCommerce, and Wix.

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PayPal:

PayPal is already integrated with many of the best e-commerce and shopping cart platforms. Some applications it integrates with are QuickBooks Online, Shopify, Big Commerce, WooCommerce, and SalesVu. 

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4. Customer Service 

Square: 

Square provides customer support through live chat with a virtual assistant or human representative, email, phone, and social media. Merchants can connect with the company’s representative Monday through Friday from 6 AM to 6 PM Pacific Time. 

Resolving issues quickly outside of these hours can take time and effort. For prompt technical support, the company offers troubleshooting and FAQs on its website. 

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PayPal: 

PayPal offers customer support by instant messaging, phone, or online through its Resolution Center and community forums. As with Square, it features a FAQ and troubleshooting section on its site. Agents are available Monday through Sunday from 6 AM to 6 PM Pacific Time. 

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5. Plans and Pricing

Square: 

Square’s basic plan comes with no monthly fee, but adding more capabilities and add-ons will incur fees. There are Plus and Premium monthly plans as well that start at $29 per month. The following charges apply when your nonprofit use is receiving funds:

• In-person transactions: 2.6% + $0.10 per transaction.

• Online and keyed-in transactions: 2.9% + $0.30 per transaction.

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Square offers free card readers when you create a new account. A POS registration system costs $10 to $799, and the platform has no chargeback fees.

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PayPal:

PayPal has no monthly fees like Square, but there are transaction and processing fees. Nonprofits receive standard rates for domestic payments, and discounts are offered to qualified charities. You must pay a $20 chargeback fee and a $30 monthly fee for a virtual terminal.

• Standard rate for registered 501(c)(3) nonprofits: 1.99% + $0.49 per domestic transaction.

• International fees: 1.50% + a fixed fee based on the currency received.

• Micropayments: These are available for transactions under $10 at a rate of 5% + $0.05 per transaction.

• General pricing: 2.89% + $0.49 per transaction for businesses

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Top 5 Square and PayPal Payments Alternatives For Your Nonprofit 

1. Zeffy

Recommended For: Nonprofits looking for a 100% free payment processor

Zeffy offers the only option out of all payment service providers designed specifically to consider nonprofits' needs. It understands how much every dollar makes a difference in fulfilling your mission. With Zeffy, you receive every dollar your donors donate to your nonprofit. 

Thanks to its voluntary contribution model, Zeffy covers all fees. With Zeffy, you can process payments, collect donations, share receipts, store donor information, create reports, and track fundraising campaigns all in the same place without paying anything from your pocket.

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• Accepts Payments From: Accepts credit and debit card payments online globally, ACH, Apple Pay, Google Pay, bank transfers, and checks.

• Payout Time: The payouts for the funds you raise are deposited in your bank account weekly or monthly.

• In-Person: Using Tap to Pay, your nonprofit easily collects in-person donations using the iPhone. All donors have to do is tap their credit card or digital wallet on the mobile device.

• Fees: ‍100% free with no hidden costs 

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2. Stripe 

Recommended For: Nonprofits looking for an integrated payment processor with the option to customize the point of sale. 

Stripe is a reliable payment processing software that integrates easily with your website, donation pages, fundraising forms, and other platforms. It has various APIs to customize your payment solution to your nonprofit's needs. 

Stripe's payment gateway is available in 34 countries and accommodates 135 currencies, making it an excellent tool for accepting international transactions. 

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• Accepts Payments From: Mastercard, Visa American Express, Diners Club, Discover, China UnionPay, JCB, and ACH payments.

• Payout Time: ‍Offers weekly, monthly, daily, or manual schedule options. Instant payouts are available with additional charges.

• In-Person: Available with Stripe’s credit card reader, Stripe Terminal. Additional fees may apply.

• Fees: ‍Nonprofits processing 80% or more donations with Stripe get a discounted fee of 2.2% + $0.30 per transaction.

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3. Helcim 

Recommended For: Nonprofits want a dedicated and reliable solution for credit card transactions. 

Helcim is another payment processing platform that nonprofits can consider as an alternative to Square and PayPal. The solution enables you to accept online, phone, or in-person payments. 

If you want to offer recurring donations, it features a subscription management system that streamlines setting monthly payments. You can track the number of donors currently contributing online, automate payment notices and reminders, and flag if the donor's credit card expires soon. 

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• Accepts Payments From: Major credit cards, debit cards, Google Pay, Apple Pay, and ACH.

• Payout Time: Settlement requests are generally handled within 1-2 business days post raising the request.

• In-Person: Available with Virtual Terminal and Card Reader

• Fees: Qualified charities have to pay:
  • Visa Canada - 0.98% to 2.00%
  • MasterCard Canada - 0.92% to 1.80%
  • Visa US - 0.65% + $0.15 to 1.35% + $0.05
  • MC US - 1.45% + $0.15 to 2.00% +$0.10

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4. Bloomerang Payments 

Recommended For: Nonprofits looking for an advanced payment platform with advanced security features and a strong support team.

Bloomerang Payments relies exclusively on industry-leading fraud monitoring tools to detect and prevent fraudulent transactions. It integrates with your online giving tools, such as embeddable donation forms, donate buttons, text-to-give, and donation pages. 

Data collected through Bloomerang Payments automatically flows into your Bloomerang CRM, streamlining receipting, acknowledgments, and reporting. 

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• Accepts Payments From: ‍Mastercard, Visa, American Express, Diners Club, JCB, ACH, Apple Pay, Google Pay, Microsoft Pay

• Payout Time: ‍Daily deposits with a two-day delay.

• In-Person Transactions: Offers a Tap-to-Pay solution to collect in-person payments.

• Fees: ‍A transaction fee of 2.2% + $0.30 for payments through debit and credit cards and 0.8% + $0.30 for ACH transactions

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5. iATS Payments

Recommended For: Nonprofits are looking for a payment processing tool that integrates with their existing fundraising software easily. 

With over 20 years of experience, iATS Payments is one of nonprofit organizations' earliest payment processing platforms. 

It integrates with various fundraising platforms to process donations, including mobile bidding, auction, text-to-give, and peer-to-peer. All your data is synced in one place, making sending receipts and managing donor relationships easy. 

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• Accepts Payments From: Visa, Mastercard, American Express, Discover, and ACH transactions

• Payout Time: For US organizations, transactions through Mastercard, Visa, and American Express are deposited every one to two business days, and ACH transactions are deposited every Wednesday.

• In-Person Transactions: ‍Available with mobile payment app compatible on Apple devices

• Fees: ‍Charges credit card processing rates between 2.49% and 3.2%

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Final Verdict on Square Vs Paypal: Which Is the Better Payment Processing Option?

Square and PayPal are popular payment processing solutions with unique features that suit different organizational needs. Similar options, like Zelle and Stripe, are excellent payment processors but need more specialization in specific pricing and functionality for fundraising teams.

Explicitly designed for charitable organizations, Zeffy is a zero-fee, comprehensive, and user-friendly payment processing platform that allows nonprofits to collect both online and in-person donations. 

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FAQs on Square vs. PayPal

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