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How Much Does PayPal Take Out of Donations?

How Much Does PayPal Take Out of Donations?

When churches wonder about using PayPal for their online gifts, one of their concerns is PayPal’s donation transaction fees. That’s a legitimate concern, so let’s take a look. 

It turns out there may be more to PayPal than meets the eye.

PayPal Donation Transaction Fees

Transaction fees constantly fluctuate, but here is a brief summary of PayPal’s donation transaction fees as of this date. These rates applies to domestic donations only; international donations rates vary. You can find an extensive breakdown of PayPal’s merchant fees here. But these are the two most likely to relate to your church:


A donation is defined as a gift, not a purchase or the cost of a service.

PayPal’s donation rate is currently 2.89% of the gift, plus a fixed fee of $0.49 USD per transaction.


PayPal also offers charity donation transaction rates. These rates are subject to application and pre-approval by PayPal. If you can verify that your church is a legitimate 501(c)3, you can secure lower transaction pricing.

PayPal’s charity donation rate is currently 1.50% of the gift, plus a fixed fee of $0.49 USD per transaction.

This may sound good. But keep in mind that online giving solutions for churches have much more to offer your staff and givers. Possibly even for a competitive price.

Why We Don’t Recommend PayPal for Churches

PayPal can seem attractive because it’s easy to get started and seems inexpensive. It’s also secure and private. But consider these reasons to avoid PayPal as a church online giving solution:

The Giver’s Experience

  • Givers can’t designate their gifts to specific ministries
  • Many people won’t use PayPal
  • Givers can be locked out for what PayPal deems suspicious activity
  • Givers must handle any transaction issues through PayPal

The Church’s Experience

  • PayPal is a bare-bones platform that only transfers gifts. There are no additional features without purchasing additional services. No PayPal features directly meet church’s needs.
  • They aren’t known for their customer service.
  • PayPal has a tedious verification process and strict policies.
  • Gift turnaround time can be lengthy.
  • Chargebacks are expensive ($20 in U.S.) (i.e. Someone reverses their gift and the church must pay fees both ways without keeping the gift).
  • Accounts can be frozen or suspended for months, with funds held for up to 6 months. This disciplinary action can occur because of spikes in giving, complaints, logins from different IP addresses, or even “controversial content” on your website (i.e. some religious views). And this status can be difficult to resolve.

Looking for Simple and Affordable Church Giving Software?

Is the lure of PayPal that it is simple and affordable? If so, we invite you to consider an alternative that actually simplifies giving for you – affordably.

“Simple software” has a nice ring. But the reality is that online giving is not a simple process. So a solution that bills itself as simple can ultimately create a lot of complexities for givers and finance teams. No matter how affordable it is.

What if the answer lies, surprisingly, in a comprehensive contributions and donor giving solution with:

  • No monthly fee or contract
  • Competitive transaction rates
  • A structure and managed services team that automates everything so it’s simple for YOU?

What if this system streamlines the entire process of giving from start to finish? What if it integrates seamlessly with your accounting software and ChMS?

PayPal can never be this for churches. But Vision2 can…and does.

Learn more about Vision2 today.

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