Alternative to Paypal - Involves Charity

**aholl333** · 04-27-2008 04:57 PM

Hey everyone,

My idea is to have an online payment system like Paypal, but where the transaction fees go to charity. Maybe not all of the transaction fees, but 2/3 or more. The company would keep enough to run the business, but gaining a profit wouldn't be the main focus. This would need considerable funding, but at this point its just an idea. I think that there would be significant appeal to use an online payment system that helps people every time a purchase is made. The fees wouldn't be above the average of companies like Paypal and Bidpay. Another focus would be superior customer service.

Thanks for looking, and any feedback or knowledge in this arena would be extremely helpful.

**mbolton2181** · 04-27-2008 05:08 PM

It's a cool idea. I see some difficulties; but if you can do it... more power to you. For ideas like this which limit profit in order to help society it can be difficult.. a businesses primary objective is to make a return for their shareholders and it's tough to get around that. I suggest looking up this new kind of business I heard a speaker talk about, called a B Corp. They redid the articles of corporation so that they could care about more than their shareholders... cool idea though.

**rogercbryan** · 04-27-2008 05:32 PM

It's a good catch... I do a lot of non-profit work and I can think of a few organizations that would take part. The problem will be finding a margin where by the company could operate with out pricing themselves out of the market. If you find a way to do that let me know... I have plenty of non-profits you can work with.

**warrensway** · 05-05-2008 11:43 PM

Yeah it will be hard to judge, what the correct price or percentage to charge would be.

**jasaunders** · 05-06-2008 06:42 AM

I can't imagine most companies would want to use this unless they saw a tax benefit. If you were a 501(c)(3), I could see people using the service to have a percentage of their transaction fees be deductible. For large compaies that do a lot of online transactions, this would be great. However, I don't see businesses using this just because they want to donate to charity; they already have their own corporate charitable programs if they are interested in that sort of thing.

**aholl333** · 05-06-2008 04:47 PM

But what if the demand came from the consumers? If I could get this idea off the ground (and thats a big if, the capital needed to start it would be crazy), wouldn't most customers gravitate towards it? Thats what my thinking has been. I believe that most customers would feel really good knowing that with every online purchase they made, some of the service fee would go to charity. Any more criticism or feedback would be appreciated, as well as any help in figuring out how to get this idea off the ground. This is just an idea I had, and I don't even know if its feasible, and whether or not I could even compete with the likes of Paypal and Google Checkout.

**jasaunders** · 05-06-2008 05:26 PM

The bulk of revenue for Paypal doesn't come from person to person money transfers. It comes from business transactions with Paypal being the payment processor (in which case consumers don't even know paypal is being used) or Paypal is used for eBay transactions and that's only because consumers are forced to do so.
I don't think you will be successful going after peer-to-peer transactions, it seems like too small of a market. Of course, I'm just guessing, so maybe you can do the math that would prove me wrong and make this business model viable.

**aholl333** · 05-06-2008 05:51 PM

Wouldn't a company be interested in using a payment processor that donated much of its transaction fees to charity? I believe this would be great publicity for companies, as they could say that they were using a payment system that helped people every time a purchase was made. I do believe that most of the money would come from costumer to business purchases, not peer to peer transfers.

**jasaunders** · 05-06-2008 09:50 PM

Originally Posted by aholl333

Wouldn't a company be interested in using a payment processor that donated much of its transaction fees to charity? I believe this would be great publicity for companies, as they could say that they were using a payment system that helped people every time a purchase was made. I do believe that most of the money would come from costumer to business purchases, not peer to peer transfers.

No, a company would not be interested in a payment processor that donated transaction fees to charity unless they received a tax benefit for doing so. Companies are interested in a payment processor that is reliable, easy to implement and use, and low cost.

**ljo1993** · 05-07-2008 02:23 PM

There is a site which already offers this service:

JustGiving.com

But best of luck

**aholl333** · 05-07-2008 04:40 PM

Thanks for all of the feedback everyone!

There is a site which already offers this service:

JustGiving.com

This site is not the same as my proposed site would be. My site would be a full fledged online payment system like Paypal. JustGiving doesn't provide a Paypal like service. As far as I know there is no payment system that contributes much of its transaction and or overall fees to charity.

No, a company would not be interested in a payment processor that donated transaction fees to charity unless they received a tax benefit for doing so. Companies are interested in a payment processor that is reliable, easy to implement and use, and low cost.

This is true, a payment processor that is reliable, easy to implement and use, and is low cost are definitely the most important to businesses, and my site would have to better existing companies like Paypal to take business away. I do believe there is still a market for a new payment system, and I think if there we're to be enough consumer demand then the businesses would have to switch. People love the idea of donating money, and if there was a legitimate option that didn't cost more to businesses, I believe costumers would start to demand its use. I also think this would be set up as a non-profit, and that could draw big interest as it would be the first of payment system of its kind (that I know of).