Choosing the right payment processor 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 dive deep into the pros and cons of Square and PayPal, examining their core features, pricing structures, integrations, and customer support.
We'll also introduce you to five powerful Square and PayPal alternatives, including Zeffy - a game-changing, fee-free platform designed specifically for nonprofits. By the end of this article, you'll have all the information you need to make an informed decision and take your fundraising efforts to the next level.
Square vs. PayPal Highlights
Square: Best For In-Person Transactions
Square is one of the popular payment processing platforms for nonprofit organizations of all sizes. Square for nonprofits is a good choice if you want to collect donations in person.
Its various hardware options, including a mobile card reader, POS system and application, and magstripe, facilitate contactless payments anywhere through your smartphone or tablet.
Pros of Using Square
- Square payment service is quick and free 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.
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.
→ Using Square for Nonprofit Donations: Read our complete guide!
PayPal: Best For E-commerce and Online Payments
PayPal is a trusted and widely recognizable brand worldwide to accept online payments. While not specifically designed for nonprofits, it offers a wide range of fundraising tools to support organizations of all sizes connect with donors 24/7.
From adding a donate button to your website to creating an advanced and customized donation process to a custom PayPal Me Link, the platform helps you collect donations in the way that suits you best.
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.
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 support and phone support.
- The platform is not specifically designed for nonprofit organizations.
Square Vs. PayPal: A Comparison of Their Features
1. Setup and Use
Square:
The Square app and dashboard are further intuitive and designed with small organizations in mind. The setup process is guided, making it simple for users to configure their settings.
The platform’s hardware integrations are typically plug-and-play, which means nonprofits can start accepting donation payments with Square almost immediately.
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.
PayPal offers various setup options, including PayPal donate buttons for websites or forms, Zettle, formerly known as PayPal Here, for in-person transactions, PayPal Payments Pro for a fully customized and branded donation process, and PayPal Checkout for e-commerce.
Winner: It’s a tie between the two platforms, as both are very easy to set up and use and don’t involve many technicalities.
2. Hardware
Square:
Square designs and produces its own hardware solutions to accept payments.
- Square Reader:
Connects to tablet or smartphone wirelessly via Bluetooth, allowing you to accept funds from any location. The first reader is free with sign-up but only allows you to swipe magnetic stripe cards. You have a Square reader for contactless and chip payments available at $49.
- Square Terminal:
Uses Bluetooth and accepts cards via tap, swipe, and insertion for even more functionality. Available at $299 and prints receipts.
- Square POS Register:
Takes all major credit cards by inserting, tapping, or swiping. Works standalone or with accessories like the receipt printer, handheld scanner, and cash box. Register costs $799 or $30 for 24 months.
PayPal:
PayPal offers the following hardware options for accepting payments:
- Zettle Card Reader:
Wireless and accepts tapped, chipped, and swiped cards. Contactless digital wallets like Apple Pay and Google Pay. Numeric PIN pad for debit card transactions. The Zettle card reader costs $29, 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.
Winner: Square offers a number of hardware products to help merchants process transactions. Its solutions are more attractive, have an integrated and sleek look, and have a supporter-facing digital interface. With its POS equipment, PayPal takes a more simplistic approach, offering just a couple of device options.
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.
PayPal:
PayPal is already integrated with many of the best e-commerce and shopping cart platforms. Some of the applications it integrates with are QuickBooks Online, Shopify, Big Commerce, WooCommerce, and SalesVu.
Winner: Square is the winner for the higher volume of integrations. Some integrations may require a programmer to set up. For ease of use, nonprofits may prefer pre-integrated PayPal.
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 be a little difficult. It offers troubleshooting and FAQs on its website in case of prompt technical support.
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.
Winner: Square and PayPal are tied for customer service. Neither one offers 24/7 support, and both have limited live chat channels and phone help.
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.
Square offers free card readers when you create a new account. A POS registration system costs $10 to $799, and the platform doesn’t have any chargeback fees.
>Comparing Square for nonprofits? Explore why Zeffy is a fee-free alternative worth considering!
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 will have to 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 transactions: 1.50% + a fixed fee based on the currency received.
- Micropayments: Available for transactions under $10, with a rate of 5% + $0.05 per transaction.
- General pricing: 2.89% + $0.49 per transaction for businesses
Winner: PayPal has the best pricing options, but Square does not have any chargeback fee or monthly fee for its hardware. The winner for this category comes down to the nonprofit’s specific needs, such as the volume of transactions in-person vs online, the features required, and the integrations required.
>Want to keep more of your donations? See why Zeffy is a smarter choice over PayPal for nonprofits!
Top 5 Square and PayPal Payments Alternatives For Your Nonprofit
1. Zeffy
Recommended For: Nonprofits looking for a 100% free payment processor
Zeffy offers a dedicated payment processing solution designed specifically after considering 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 payment processing and transaction 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.
- 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 either weekly or monthly.
- In-person Transactions:
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
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 according to your nonprofit's specific needs.
Stripe is available in 34 countries and accommodates 135 currencies, making it a great tool for accepting international transactions.
- 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 Transactions:
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.
>See how Zeffy users can get access to Stripe’s payment gateway for a 0% fee!
3. Helcim
Recommended For: Nonprofits that 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.
- 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 Transactions:
Available with Virtual Terminal and Card Reader
- Fees: Qualified charities have to pay:some text
- 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
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 easily 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.
- 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:
Transaction fees of 2.2% + $0.30 for payments through debit and credit cards and 0.8% + $0.30 for ACH transactions
5. iATS Payments
Recommended For: Nonprofits looking for a payment processing tool that integrates with its existing fundraising software with ease.
With over 20 years of experience, iATS Payments is one of the earliest payment processing platforms to serve nonprofit organizations.
It integrates with a variety of fundraising platforms, including mobile bidding, auction, text-to-give, or peer-to-peer to process donations. All your data is synced in one place, making sending receipts and managing donor relationships easy.
- 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. ACH transactions 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%
Final Verdict on Square Vs Paypal: Which Is Better to Accept Payments?
Square and PayPal are both popular payment processing solutions, each with unique features that might suit different organizational needs. Both come with transaction fees that can reduce the overall impact of your fundraising efforts and neither is specifically tailored for nonprofits.
Designed specifically for charitable organizations, Zeffy is a zero-fee, comprehensive, and user-friendly payment processing platform allowing nonprofits to collect both online and in-person donations. We cover all fees, including processing and transaction fees, ensuring your nonprofit doesn't lose any dollars.
FAQs on Square vs. PayPal
Does Square hold your money like PayPal?
PayPal merchants often complain that the payment processor freezes their accounts or holds their money because of suspected fraud. While it’s good that PayPal is extremely mindful of potential credit card fraud, holding money leads to cash flow problems for nonprofits.
Conversely, Square is much less likely to freeze your account or hold your money. Transferring the money from your Square account to the bank account is also quicker.
Is it easy to switch and migrate from PayPal to Square?
Yes, switching from PayPal to Square is easier. If you have lots of data to migrate, an expert from the Square team will help you set up software and hardware. They offer assistance with connecting existing apps and services. Training your staff and help you make the most of Square.
What is better, Square or PayPal?
Both Square and PayPal are pretty good choices for payment processors. Square is the better option for nonprofit organizations that want to accept in-person transactions. It provides free hardware that lets you accept funds using your cell phone.
PayPal is the right choice if an organization primarily operates online, needs to add payment options to an existing website and donation page, or wants to set up recurring donations.
If you’re looking for affordable and comprehensive solutions specifically tailored for nonprofits, Zeffy is the answer! It is the only 100% free fundraising platform for nonprofits that covers even the transaction fees.
Can you use Square with PayPal?
Square Online has a built-in payment processor called Square Payments that is automatically configured. You can choose to use a different processor. PayPal is one of the options to use for processing payments. You will require a PayPal business account and need to be on a Square Online Plus plan to accept PayPal.
