PayPal is an online payment system which allows individuals or organisations to make payments for items and services purchased online without the need to enter card details, as each PayPal account is linked to a bank account. PayPal is a very useful system for Branches to use to receive money from their events and rallies and also it can be useful if Branches are going to pay for their members entries into other competitions (such as the National Championships or Area competitions) but comes with an inherent risk as it is a single authorisation system. However, as it is a well established system and has proved very useful, its use is permitted but there are strict procedures which must be adhered to prevent fraud or theft of Branch funds.

There are Pony Club guidelines for the use of PayPal accounts, which can be accessed here.

How to set-up PayPal

PayPal usually charge fees of 3.4% (plus 20p a transaction) on all income received, but if setup as a charity PayPal account, these fees can be reduced to 1.4% instead. The PayPal website may change, so a step-by-step guide on how to setup PayPal for the branch would most likely be out of date very quickly. However, these steps should help guide you to set up the PayPal account as a charity account, and therefore obtain the smaller fees, for the Branch.

For the original setup of a PayPal account, it can be broken down into these main areas:

1. Create a PayPal account
a) Set up the account as a business (not as an individual).
b) Choose the “standard” PayPal account, because the “Pro” version requires set monthly charges to be paid.
c) When selecting the type of account, choose a “Not For Profit Organisation”, and select “Charity” in the next step
d) Fill out all the following details with your branch details - for example, the name of the branch, address, the branch bank account that PayPal should be linked to etc.
e) After verifying the bank account (PayPal bank a pence figure into your account with a 4 digit pin you have to tell them about) then the PayPal account is set up.

To do this you will have to enter an email address. We recommend that for the purposes of opening and operating your Branch PayPal account you use your Branch’s email address. Every Branch is allocated one of these email address and they are listed in the year book. If you do not currently have access to this email account then please contact either the Finance or IT teams in the Pony Club office and they will arrange for you to get access.

2. Verify as a charity account
Your PayPal account is setup per Step 1, so you could start using the PayPal account right away. They will charge you 3.4% + 20p a transaction though (on all monies coming into the PayPal account). Charities can get a cheaper rate of 1.4% + 20p a transaction, which is a good saving, but to do this you have to verify with PayPal that you are part of The Pony Club charity.

You have to go through the various PayPal screens to confirm you are a charity from this link: . They will ask you at some stages through this process to provide documents to prove you are a charity, and for that you will need the help of the office to provide these documents.

What PayPal do and don’t accept as acceptable documents changes every month, so it’s hard to keep a track of exactly what will and won’t work, but we will need the following information to provide you with these documents:
a) The exact name of the PayPal account
b) The email address the PayPal account is linked to
c) The exact name of the bank account that the PayPal account is tied up to
d) The full names and positions of the people you want to be authorised to speak to PayPal. We usually suggest three people get authorised here, those being at least DC and treasurer and usually one other person.
If you provide this information to the Finance team, we can provide you with the documents PayPal require.
After completing these screens and resolving any problems PayPal may have, the PayPal account with be verified as a charity and benefit from the cheaper rates.

3. Lift any limits placed on the account
This step can’t be done until Steps 1 and 2 have been completed and as per the verifying of a charity account you only have to do this once. All PayPal accounts have a “receiving” limit on them due to EU Money Laundering Regulations. It means that when you receive a total of €1,800 (or currency equivalent) into your PayPal account they will stop you being able to withdraw any funds until you have satisfied PayPal that you conform to those regulations.

To remove the receiving limit on your account:
a) Go to your accounts limit page.
b) Select ‘Receiving limit per year’ and click Lift Limits, and follow the steps.

If access to your account is already limited because of the receiving limit, go to your resolution centre and follow the instructions.

You need the same information as used for the verifying a charity stage to prove your existence in accordance with EU Money Laundering Regulations.

You can deal with this requirement as soon as you open your account or when you get the message about being close to this receiving limit. Although PayPal recommend taking this proactive approach to avoid any possible disruption in the future by dealing with it was soon as you open the account, they don’t actively state that anywhere, we would agree to try and lift these limits sooner rather than later to avoid disruption later on.

If you have any queries about how to set up the PayPal account or any general PayPal queries, please contact Andrew Brown who will be able to advise.

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