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 The PayPal website may change, so a step-by-step guide on how to setup PayPal for the branch would most likely be out of date very quickly.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.

Step 1. Go to the PayPal website and start to set up an account as a business (not as an individual). PayPal may ask if you would like a standard PayPal account or a Pro account. Choose the standard account as the Pro version requires set monthly charges to be paid.

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.

The reason we recommend you use this email account is that this email address can be accessed and have its password reset by the Pony club office if required. If a personal email account is used then, in the event of that person leaving the Branch committee, there could be issues with accessing the email address and the associated PayPal account. Also, though multiple people could initially be given access to any email account there is nothing to stop one person with access changing the password and the security questions and stopping the other users gaining access. The ability for one user to do this obviously increases the risk of fraud occurring on a PayPal account. The email address can always have their passwords reset quickly by the Pony Club central IT team, and so the fraud risk is significantly decreased.   

Step 2. When selecting the type of account, choose a “Not For Profit Organisation”, and select Charity in the next step. 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.

Step 3. At some point after completing the account, you may be challenged by PayPal to provide evidence that you are part of a charity and are entitled to receive the reduced charity PayPal fees. At this stage, please contact the finance team in The Pony Club office who will be able to provide a letter to support the Branch’s claim that it is part of a charity. The Branch can then give this letter to PayPal.

The PayPal account is then setup as a charity account and will now be ready to be used by the Branch, subject to Pony Club guidelines.

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

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