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We are a 501c3 nonprofit and plan to apply for no fee program.
Questions:
1. I would like donors/buyers to be able to donate/pay through paypal OR use their credit card without going through paypal. Paypal charges too much for processing, I have found a much cheaper solution.
Is this possible with e-junkie?
2. is it possible to set up automatically recurring donations? for example, monthly?
3. I'm not clear on the thank you feature. Can I send thank you manually ourselves, or must e-junkie send a thank you?

thanks in advance

You do not need to accept PayPal payments in order to use E-junkie, and you can choose to accept any combination of online payment methods that we support:
http://www.e-junkie.com/ej/help.payment.processors.htm

If you have a merchant account at your bank that allows you do authorize direct card-based payments, you should be able to use Authorize.Net as your payment gateway (the online equivalent of your card-swipe terminal).

We have no way to support auto-recurring payments, as PayPal provides no way to integrate their recurring-payments solution with our cart; our own Subscription payments actually use PayPal's own recurring-payment solution as-is, but we can't integrate those with our cart system, and even if we could, we'd have no back-end services to go along with them (i.e., no way to manage subscriptions/memberships nor provide anything to buyers on an ongoing/scheduled/regular basis).

Most payment processors send their own receipt email for payments. For digital products (downloads, stored/generated codes, product-based redirection), we also automatically send a thank-you email to the buyer once the payment processor notifies us of completed payment, and that message contains a link to reach their thank-you page where they can obtain their product. Tangible/non-digital products can optionally be configured to send a thank-you email message as well, or you can choose to configure one common thank-you email for all products:
http://www.e-junkie.com/ej/help.custom.thankyou-email.htm