Why Frontier Recommends Stripe for Charity E-Commerce

As giving moves online, your choice of an e-commerce payment system matters more than ever. We recommend Stripe. Here’s why.

PayPal Payments Pro: No Longer the Best Option for Charities

While PayPal provides a less-than-stellar back end experience, we have spent the last few years recommending PayPal Payments Pro as the best option for e-commerce. We considered the easy monthly donation setup option to be worth the headaches with poor support, unhelpful website, and clunky user experience. But as the e-commerce world continues to change, we have been watching a tool called Stripe, and have been increasingly impressed. We are now adopting Stripe as our go-to payment processor.

Why Stripe?

Stripe, unlike many other payment processors, does not have a monthly fee. For many charities, this can be a critical deciding factor. In terms of other fees, Stripe charges 2.9% + $0.30 per successful transaction, and less for high volume users. While some may like Stripe because of the lack of a monthly fee, others may look around for a lower per-transaction percentage fee.

But there are factors beside fees to consider. It may seem like you just pick the least expensive payment provider, set it up and start bringing in donations, right? We think not. Here’s why.

What to Look for in an E-Commerce System

While a provider may seem cheaper at the outset, or may have a lower % on transaction fees, you could end up losing donations because of it.

There are two rules that I deem absolutely necessary when discussing online donations.

Rule #1: Create a positive user experience.

You want to make the process of giving money through your website as seamless and enjoyable as possible. This is both so the donor doesn’t get frustrated and stop the donation process and also so they are inclined to give again in the future.

The donor should feel inspired by the organization. There is a major difference between paying bills online (emotionless; not fun) and getting the warm fuzzies because you are giving to a worthwhile cause (emotionally fulfilling; fun).

Take heifer.org. As you scroll down and see the different photos, you realize that you have the choice to give among a variety of emotionally moving options. And you feel good about it because you are seeing images of the lives that will be impacted by your donation. The same goes for pencilsofpromise.org.

The key thing when committing to inspiring your donors is inspiring, authentic, best-practice design. And to ensure good web design will work with your payment processor, you need to know that the payment processor is customizable!

Stripe is, by far, one of the most easily customizable payment processors out there.

You want to make the process of giving money through your website as seamless and enjoyable as possible.

No matter how great the cause, an uninspiring donation form will hurt your bottom line. Take a business-style form like this one below. This site uses Beanstream as the payment processor. Beanstream records the donation as if you are actually purchasing an item — just like an amazon.com-style shopping cart. It lists your gift as 1x $25.00 and then has a subtotal/total section. The entire process feels transactional, rather than inspirational. While there is nothing technically wrong with this form, the user experience is not enjoyable and the emotional connection to an otherwise great organization is essentially lost.

Charities will lose online donations if giving is not made easy and inspiring. Imagine if you lost even 3% of your online giving because of bad user experience? This possibility alone should be enough to convince you!

Rule #2: Consistently observe and improve the donation experience.

You need to be tracking your donors to ensure you can continually improve your experience and grow your online donations. For instance, I know that people give far more via email requests versus Facebook requests. The reason I know this is because I consistently track how people’s gifts come through. Stripe allows you to track your donors and your data.

The first rule with tracking data is that your donors should never ever leave your site. Imagine if you were making a payment to an organization you are just getting to know. You’ve finally made the decision to give, and start to fill out the form. Then, BAM! You press donate and you are redirected to a site that you’ve never seen before.

Maybe you see the organization’s logo somewhere on the page, but it looks nothing like their site. It can make you feel nervous — is your money actually going to the correct organization? Will it be used for the right thing? If they value my gift, why are they sending me here?

Sites like CanadaHelps are incredibly convenient for young charities with fewer than 25 donors. But the long-term cost of continuing with that kind of platform is extremely high. When someone gives to this kind of donation site, your data isn’t stored within your organization’s database. How are you going to send a thank-you card or another request for money if you don’t have their contact info?

Your payment processor needs to be customizable to your site! If it’s not, you are losing donors and you are losing data. Stripe is fully customizable to your site.

A donor can also leave your site, but be completely unaware that it is happening. In this case, the user won’t know that they’ve left, but the donate form is on a different IP address. Your data will be lost. Payment Processors like Beanstream do this. You are redirected to a site hosted by them that appears like the organization’s site. If you use a processor like this, the site analytics will show someone leaving the site at the donate page and then a different user coming back to the thank-you page.

And no, Stripe will never send donors away from the organization’s site.

One important note is that with Stripe, you actually aren’t using a back-end form builder (like Formstack). Many other processors require you to use one. With PayPal, you have a choice between many different forms, all of which have a fee. IATS, a charity specific payment processor, requires you to use their form builder, Aura. The major problem with using a form builder is the lack of customization that it imposes on you.

Why does a customized form matter?

• It gives users the option to dedicate a gift in honour or memorial

• You can ask users what inspired their gift or other comments

• You can track more data through hidden fields (such as campaign codes)

• You can give more options to designate their giving to different funds or staff

Other Guidelines for a Payment Processor:

Recurring Gifts

Monthly donors tend to be younger and therefore more likely to give online. If giving monthly isn’t easy, you are losing out on more than just a one-time $25 gift. You could be losing out on hundreds or thousands in the form of recurring gifts, their loyalty and their future gifts. The shopping cart style that I mentioned earlier is a major deterrent for monthly gifts. It compiles your gifts as a lump (for example, 12 x $25.00 donation). In contrast, head over to sjma.ca and see how incredibly smooth and simple their monthly donation process is.

Additionally, certain payment processors allow you to input any amount as your gift, while others force you to set up certain ‘subscriptions’ and your donors are limited to the preset amounts.

Unfortunately, PayPal has virtually removed itself from the monthly gift game through a recent change. They no longer allow you to change your donors’ credit card numbers and information. This means that whenever someone’s card expires or they have had it replaced, you need to start an entirely new monthly donation. While this is possible, it definitely changes the process, making it more difficult for  your administrator. And you’ve guessed it, Stripe doesn’t require this!

Hidden Fees

As I mentioned earlier, PayPal requires the organization to use an online form builder, like Formstack. This adds an additional annual fee of $468 (for Formstack’s minimum account). Stripe doesn’t require any form builder, so you are able to avoid this ongoing cost and have full customization abilities.

In conclusion

When choosing a payment processor that will maximize donations, there are a host of factors. While the initial monthly cost or per-transaction percentage fee may seem like the main financial question, it really comes down to how many donations will you be receiving. You may choose to use the cheapest payment processor and save .5% of each transaction fee. But if you lose out on potential one time OR monthly gifts because your site is not customized, streamlined, easy to use or your data isn’t trackable, than you are losing more in the long term.

Stripe makes it easy to create a fully customized, inspiring form. It helps ensure the user experience will be positive, while maintaining ease on the administrative side. Stripe allows the organization to track their donor data and therefore improve a charity’s fundraising in the future.

I think Stripe has become the obvious choice for payment processors - and if you disagree after reading this, I’d love to have a conversation to convince you. Just send me an email at ben@frontier.io!

P.S. We’re involved in payment processors everyday. If you want us to help you stay up-to-date on the best options for online giving, sign up for our newsletter below!