Payment processing for small nonprofits: Stripe vs PayPal vs Square fees explained
By Glenda Hood · Lead Researcher
Published June 1, 2026
Payment processing for small nonprofits is a critical factor when choosing how to handle donations and payments efficiently. Understanding Stripe vs PayPal vs Square fees explained is essential for minimizing costs and maximizing the funds that reach your cause.
Key takeaways
- Stripe, PayPal, and Square are the top three payment processors used by small nonprofits, each with straightforward fee structures but different fee components.
- Stripe generally offers the most customizable payment options with transparent flat-rate fees but requires some technical setup.
- PayPal is widely recognized, easy to set up, and familiar to donors but can have slightly higher fees with less flexibility.
- Square provides simple POS (point-of-sale) solutions with fixed fees, beneficial for in-person events but offers fewer online-specific nonprofit tools.
- Choosing the right payment processor depends on your nonprofit’s typical transaction size, donor preferences, and whether you emphasize online or in-person donations.
How payment processing works for small nonprofits
Payment processors are third-party services that handle credit card payments and other electronic transactions on behalf of organizations. For small nonprofits, payment processing enables donors to contribute via credit or debit cards, mobile wallets, and bank transfers. Your payment processor collects the funds, deducts transaction fees, and deposits the balance into your nonprofit’s bank account.
When comparing Stripe vs PayPal vs Square fees, understanding fee structure components — such as per-transaction fees, monthly fees, payout timing, and additional service costs — is crucial. Nonprofits typically prioritize low fees to ensure maximum impact from donor contributions.
Stripe fees for small nonprofits
Stripe is popular for nonprofits that want customizable online payment forms integrated into their websites or fundraising platforms. Its fee structure is flat and transparent:
| Fee Type | Nonprofit Rate (US) |
|---|---|
| Online credit card fee | 2.2% + 30¢ per successful transaction |
| ACH bank transfers | 0.8% capped at $5 per transaction |
| Monthly fee | $0 |
| Chargeback fee | $15 (refundable if dispute resolved) |
| Customized pricing | Available for nonprofits with > $1M annual volume |
Stripe integrates with popular nonprofit tools like Donorbox and Classy, which can simplify setup without coding.
PayPal fees for small nonprofits
PayPal is the most recognized processor among donors, often trusted for ease of use and widespread acceptance. Its nonprofit-friendly rate in the U.S. is:
| Fee Type | Nonprofit Rate (US) |
|---|---|
| Online credit card fee | 2.2% + 30¢ per transaction |
| In-person fee | 2.7% per tap/dip/swipe transaction |
| Monthly fee | $0 |
| Chargeback fee | $20 (may be waived or reduced) |
| Additional fees | Micropayments at 5% + 5¢ per transaction |
PayPal provides tools like PayPal Giving Fund and special donation buttons easily embedded on nonprofit sites. It’s best for nonprofits that prioritize donor familiarity and even recurring giving via PayPal accounts.
Square fees for small nonprofits
Square offers a different set of tools geared towards nonprofits that rely on both online and in-person events such as galas and charity runs. Its fees are fixed with no monthly charges:
| Fee Type | Nonprofit Rate (US) |
|---|---|
| Online payment fee | 2.9% + 30¢ per transaction |
| In-person swipe/tap/dip | 2.6% + 10¢ per transaction |
| Monthly fee | $0 |
| Chargeback fee | $15 (fee refunded if dispute resolved) |
Square also offers free POS hardware options and integrates with popular nonprofit fundraising tools, though its online processing fees tend to be slightly higher than Stripe or PayPal.
Breakdown of fees by payment method
| Payment Processor | Online Credit Card | ACH Bank Transfer | In-Person Card Swipe | Monthly Fee | Chargeback Fee |
|---|---|---|---|---|---|
| Stripe | 2.2% + 30¢ | 0.8% (max $5) | N/A | $0 | $15 |
| PayPal | 2.2% + 30¢ | N/A | 2.7% | $0 | $20 |
| Square | 2.9% + 30¢ | N/A | 2.6% + 10¢ | $0 | $15 |
Which payment processor is best for small nonprofits?
- Choose Stripe if your nonprofit is comfortable with some technical setup, focuses primarily on online donations, and wants lower ACH transfer fees.
- Choose PayPal if you want the simplest setup with instant brand recognition and a suite of donation-specific features.
- Choose Square if you host frequent in-person events or sell merchandise alongside collecting donations.
Other fees and considerations to watch for
- Currency conversion fees: All processors charge extra when handling donations in foreign currencies, typically around 1%–2%.
- Chargeback risk: Nonprofits should monitor fraudulent or disputed transactions that may trigger chargeback fees.
- Monthly vs no monthly fees: None of the three charge mandatory monthly fees, making them cost-effective for small organizations with limited cash flow.
- Integration with fundraising platforms: If your nonprofit uses a specific platform (e.g., Donorbox, Classy, Bloomerang), check which processor integrates best.
Summary checklist for small nonprofits
| Feature/Need | Stripe | PayPal | Square |
|---|---|---|---|
| Lowest online fees | Yes | Yes (same rate) | Higher |
| Best for ACH transfers | Yes | No | No |
| In-person payments supported | Limited (via partners) | Yes | Yes (native) |
| Zero monthly fees | Yes | Yes | Yes |
| Ease of donor use | Moderate setup | Very easy | Very easy |
| Nonprofit-specific features | Available via partner | PayPal Giving Fund | Limited nonprofit tools |
| Chargeback fees | $15 | $20 | $15 |
FAQ
What is the average payment processing fee for small nonprofits?
Most small nonprofits pay between 2.2% + 30¢ and 2.9% + 30¢ per online transaction using Stripe, PayPal, or Square. ACH transfers with Stripe can reduce fees further but require more setup.
Can small nonprofits get discounted payment processing rates?
Yes, some processors offer discount or customized rates to larger nonprofits or those processing over $1 million annually. Stripe often negotiates nonprofit-specific pricing once you reach higher volumes.
Which payment processor is best for in-person donations at events?
Square provides the best in-person payment rates (2.6% + 10¢) and easy setup with free hardware options, making it ideal for event-based fundraising.
Do these payment processors support recurring donations?
All three support recurring giving but may require integration with third-party fundraising platforms for the best donor experience and management features.
How fast do nonprofits receive funds after a transaction?
Stripe usually deposits funds within 2 business days, PayPal offers near-instant access once the transaction clears, and Square deposits funds typically within 1–2 business days.
Selecting between Stripe, PayPal, and Square for your nonprofit’s payment processing depends on your donation types, volume, and event needs, but understanding fees is the first step to preserving more donor dollars for your mission.