Let’s unravel the mystery of Venmo vs. PayPal for nonprofits.
PayPal has been a long-running favorite for nonprofits to accept online donations. It’s easy to use for donors and easy to connect to for nonprofits. However, now that mobile giving is on the rise, and Venmo has taken the forefront in mobile payments, nonprofits are asking: Venmo or PayPal?
The short answer is both.
Let’s start with company structure, dive into fees, and then talk about how each functions differently.
Why Offer PayPal or Venmo Donations?
Successfully guiding donors through the experience of giving requires making it as easy as possible for them. PayPal was one of the original single sign-on solutions for consumers to use account balances or connected payment methods. It even works great on mobile devices!
However, in recent years, mobile giving and payments have been rising. This trend has introduced a few new, easier to use, payment solutions, like Venmo. Venmo is one of the most popular peer-to-peer payment platforms that has recently opened up to businesses and nonprofits.
And, the rumor is that Venmo has lower fees than any other payment gateway. Lower fees would be great for nonprofits! But, that’s not necessarily the case all around. Let’s dive deeper.
Venmo is a PayPal Company
First, it’s important to know that PayPal owns Venmo. So, essentially there is no major difference to your nonprofit when you use the two platforms.
The difference between the two platforms is primarily the donor experience and the fees.
PayPal Fees vs Venmo Fees
Up front, it looks like using Venmo for your nonprofit is cheaper than PayPal. However, PayPal’s platforms have caveats that affect your fees in a variety of ways. Each type of integration has a different fee.
First, PayPal’s standard fees to accept donations online are 2.99% + $.49 (subject to change). This is what you pay per donation when using PayPal to accept credit card donations on your website (with GiveWP, for instance). Nonprofits also get a special discounted rate with PayPal, so that fee could be even lower for your organization.
Accepting Venmo donations online requires a special connection that PayPal calls, “PayPal with Venmo.” This fee is: 3.49% = $.49.
On the other hand, Venmo does have different fees associated with accepting donations directly through the Venmo app. These fees are 1.9% + $.10. It’s important to note that this Venmo payments fee is only applied to Venmo-to-Venmo transactions, which are not open to third-party connections, like your website.
Here’s a quick visual breakdown:
| Platform | Fee | $25 Example |
|---|---|---|
| PayPal Credit Card | 2.99% + $0.49 | $1.24 in fees results in $23.76 for your Org |
| Venmo online Donations | 3.49% + $0.49 | $1.36 in fees results in $23.64 for your Org |
| Venmo App Donations | 1.9% + $0.10 | $0.58 in fees results in $24.42 for your Org |
So, which fee is best? It really depends on how you want to let your donors give. Each fee is associated with a different donor experience. And, it might be worthwhile for your organization to offer all of them.
Venmo Donations Through Apps and Websites
Accepting Venmo Donations through apps and websites requires a connection with PayPal. It’s not quite the same as accepting donations directly on the Venmo app. This is why you pay different PayPal fees for online donations with Venmo.
When you connect your website’s donation forms to Venmo, you will receive the funds in your PayPal account. However, your donors can give through Venmo with their account balance, as they normally would.
It’s up to you and your organization to determine whether the benefits of enabling your donors to donate with Venmo are worth the costs. Venmo’s ease of use for donors certainly can be beneficial. When a donor is viewing your site on a mobile browser, all they have to do is choose to pay with their Venmo account balance and complete the donation in the app. Then, they’re redirected back to your website.
Plus, 50% of people view your website on a mobile device. Make it as easy as possible for them to give so you don’t miss out on donations.
Venmo Donations Through QR Codes and Username Searches
As mentioned, you can also still accept Venmo donations natively through a Venmo account for a lower fee! Your donors will simply need to find your organization by searching your username or scanning a QR code.
While this is probably something you will want to implement for easier in-person donations, it’s less intuitive for your donor online. It also will make accounting a bit harder for your team. It’s best to keep your donation platform centralized and set up your website to allow for Venmo donations. It will save you money in the long-run.
PayPal or Venmo for Nonprofits?
The answer is both! PayPal and Venmo are both wonderful tools that work great together. Venmo helps your donors give on a mobile device, while PayPal can offer intuitive on-site credit card payment options.
Just keep in mind that PayPal’s fees vary depending on how you collect donations.
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