Millions of dollars in secure online donations will be given straight to charities due to a new PayPal Australia public ancillary fund and registered charity.

The PayPal Giving Fund uses PayPal technology and financial support to raise money to benefit Australian charities. All costs are covered by PayPal and partners, removing the need to charge charities, and guaranteeing all donations go straight to the sector.

PayPal Giving Fund Australia Director, Elaine Herlihy, said: “Traditionally, charities have collected their funding via cash or cheque donations. However, as consumer purchasing and payment behaviours become more digitised, the age-old cash donation is quickly becoming a thing of the past.”

The PayPal Giving Fund has been established in the United States, Canada and the UK and has raised over AUD$130 million to benefit 46,000 charities in 2017.

To coincide with the launch, PayPal Australia released research that reveals the way Australians donate is continuing to evolve. It showed that donations via smartphones have increased and a quarter of Australians made an online donation in the last year.

The research found that two out of five Australians intended to make a donation but could not because they did not have cash on them. It also revealed that the majority of Australians think online donations will outpace cash donations in the next five years.

“As the research shows, the way Australians are supporting their chosen charities is changing,” Herlihy said. “Charities in Australia need to embrace the opportunity that digital and online donations present.”

Sixty-one per cent of Australians said they think online donations will raise more funds if they had the option to donate via mobile and more than half would prefer to make donations via PayPal as they feel it is more secure than credit or debit card.

CEO of the McGrath Foundation, Holly Masters, said: “In an increasingly cashless society, embracing digital payment options is essential for us to connect with our supporters. For our June tax appeal campaign, PayPal payments accounted for one in four of our website donations.”

The PayPal Giving Fund has also partnered with Facebook to launch the Facebook Fundraisers in Australia. It enables registered not-for-profits and charities to receive direct donations on Facebook that are then given directly to charities. The Royal Flying Doctor Service, beyondblue and the Starlight Foundation have already joined.

The research found that a third of Australians discovered a charity through Facebook and proceeded to make a donation. A quarter of millennials have made a donation through social media and 14 per cent – up from seven – are likely to do so again.

Director of Policy at Facebook, Mia Garlick, said: “Facebook is a place where people come together to connect with their communities and support one another in meaningful ways. People often donate to support a friend who is undertaking a charity sporting event or because of a personal referral from family or friends.

“The launch of our charitable giving tools amplifies this activity and allows people to more easily donate to thousands of Australian charities through Facebook fundraisers.”