Recently, Google announced that is making Google Checkout free for Non-profits to collect donations. The two keywords "free" and "Google" collectively spurned a slew of emails from all the NGO listservs I subscribe to. Naturally, I was interested but being the cynical New Yorker I am was more inclined to read the fine print before getting up on that bandwagon.
Google is waiving transactional costs for donations to Non-profits using Google Checkout. However, the fine print is that the offer is good until 2009 after which fees are charges at a "low 2% + $0.20 per transaction". In other words, not free. Ok. So, its a generous albeit short-term offer. How does that compare to PayPal, another low cost service popular among small and mid-sized non-profits? Paypal uses the following sliding scale;
|Monthly Sales||Price Per Transaction|
|$0.00 USD-$3,000.00 USD||2.9% + $0.30 USD|
|$3,000.01 USD-$10,000.00 USD||2.5% + $0.30 USD|
|$10,000.01 USD-$100,000.00 USD||2.2% + $0.30 USD|
|> $100,000.00 USD||1.9% + $0.30 USD|
So even post 2009, Google Checkout is certainly cheaper unless you tend to get a lot of dot-com millionaires sending you $100k donations via your website (not likely) or have a very high volume of smaller donations (a nice problem to have). So it seems for larger orgs, Paypal may scale better.
Now we come to functionality. Both Google and Paypal offer cut and paste code for creating "donate now" buttons, customizable transaction pages, and API’s. However, from what I can gather Google Checkout requires that donors create a Google Account. That might not seem like a big deal, but the fact is not everyone wants to and when people are giving you money you want to make that as painless a process as possible. On our site, we inform potential donors that they do not need a Paypal account to use our donate button to address any reluctance up front.
Unfortunately, I think Google might be more interested in gathering personal data and "upselling" people to it’s other services (Gmail, Google Apps, etc) whereas PayPal is satisfied with the transaction fee. That’s just my opinion, but personally I prefer the pseudo-anonymity of Paypal’s service. Most retail sites now offer an option at checkout for creating an account or just doing a one-time purchase. Only after using a retailer a few times might I feel inclined to trust them with my personal info. Same might apply here.
I’ll probably end up having both services on our donation page and let the donors vote with their dollars.
3 thoughts on “Google Checkout vs Paypal for online donations”
I am the webmaster of a non profit and very much a novice, completely unskilled in HTML. Google seems to have an incredibly complicated system of integrating its non profit checkout into my wufoo form. Constant emails with them produce NO help. The no fee is incredibly attractive but at this point is almost not worth the hours i have put in.
I just wanted to thank you for you well written post. Having just gotten out of a meeting with some folks at the community college I work for where they were asking for help setting up a system for accepting donations from alumni I found your post. I was already pretty hot on the idea of PayPal but wanted to look into other, similar options. Now that I have read your post I think I will continue to push for PayPal. I especially like the ChipIn widget too, didn’t know about that until I saw your site. From one Eric to another, thank you.
Google checkout is great but still paypal has more advantage like they are accepting payment from 55 countries and google only from two.