Paying into a Paypal account

[Countdown]

Long story short....

I'm the Treasurer of a charity that makes grants to various organisations and individuals. We always pay these grants via Faster Payments.

A grant has been awarded to somebody who doesn't have a bank account (and doesn't want to open a bank account because the Government will sell his data). Unfortunately for me the charity is a religious one and believes it should help all of God's children no matter how fruitloopy. the grant person has requested we pay into his Paypal account. My questions are as follows;

1. is it possible to pay via bank transfer into his PP account? I assume not, in which case
2. Will we have to open a Paypal account in order to make the payment? I think we will

Assuming that we just use our paypal account to make payment to HIM, can we just leave it sitting there empty or can the Russians or North Koreans or the Chinese hack into it and take out millions of pounds that the Charity is then liable for?

I have only used Paypal rarely and I don't know what the potential fraud risks are. As PH is a total font of all knowledge I thought I would ask.

Please dont post any passive aggressive responses. It's been a long day and the air conditioning on my car wasn't working.

[Simpo Two]

So he doesn't trust banks but trusts Paypal... OK. Fruitloop.

How about cash? Take it out of your bank, hand it to him and get him to sign a receipt?

[Countdown]

Simpo Two said:

So he doesn't trust banks but trusts Paypal... OK. Fruitloop.

How about cash? Take it out of your bank, hand it to him and get him to sign a receipt?

This is going to sound odd but it's so long since we've taken out cash that I'm not sure how we would.....also we're based in Manchester, he's in Devon somewhere.

Maybe we could western union it to him?

[Simpo Two]

Hmm. Geography is not in your favour.

Anyway, why should you do all the work? How about 'If you want this grant, open a bank account'. Make up something about EU regs, charity commission, moneylaundering directives yada... everybody else does


Postal orders? Book tokens? Or just send him something nice from Amazon...

[Hawkshaw]

I may be wrong, but I thought you had to have a bank account in order to open a Paypal account.

[Simpo Two]

Hawkshaw said:

I may be wrong, but I thought you had to have a bank account in order to open a Paypal account.

Wheels are turning - is a grant taxable? He might be trying to evade tax.

[Hawkshaw]

Anyway, he would need a bank account in order to get the grant money out of his Paypal account, unless he is going to spend it all on Ebay.

I think it would be safe enough for the OP to set up a Paypal account just to make the payments as he suggests. But why should he have to? I would just tell the recipient, no bank details, no grant, that's how we do things, and don't be so ungrateful.

Edited by Hawkshaw on Monday 19th July 22:12

[AndyAudi]

Do you mind giving us a value & purpose?

I’m also a treasure for religious charity, we started occasionally using Tesco cards/vouchers to distribute to those in need of assistance.

[red_slr]

Sounds fishy to me.

[mikeiow]

Simpo Two said:

Hmm. Geography is not in your favour.

Anyway, why should you do all the work? How about 'If you want this grant, open a bank account'. Make up something about EU regs, charity commission, moneylaundering directives yada... everybody else does

^^^^
This!

Hawkshaw said:

I may be wrong, but I thought you had to have a bank account in order to open a Paypal account.

Technically you need one to get the money out, I believe. Or they may do you a paper cheque.

red_slr said:

Sounds fishy to me.

Me too….Very fishy.
No account, no charity. Simples.

[red_slr]

I would want full accountability and clear proof of where that money came from and went too. I would also want the person receiving the money to be able to spend it outside of the paypal system which they wont be able to do without a bank account as the money will remain in PP.

Security. What if their PP is hacked and they lose all the money? You going to pay a second time? PP has very little security.

Its just asking for trouble IMO.

FWIW you can pay into any paypal account without a PP account of your own. The person with a PP account can request the money from you and PP send you a link.

Also, if its over the AMLR limits PP will suspend the persons account if they have not been through AML process (provided photo ID and proof of address).

HTH.

[gumshoe]

Countdown said:

Long story short....

I'm the Treasurer of a charity that makes grants to various organisations and individuals. We always pay these grants via Faster Payments.

A grant has been awarded to somebody who doesn't have a bank account (and doesn't want to open a bank account because the Government will sell his data). Unfortunately for me the charity is a religious one and believes it should help all of God's children no matter how fruitloopy. the grant person has requested we pay into his Paypal account. My questions are as follows;

1. is it possible to pay via bank transfer into his PP account? I assume not, in which case
2. Will we have to open a Paypal account in order to make the payment? I think we will

Strange that he will have a paypal account and nothing else. The problem with sending it via Paypal is you're sending it to an email address. I think Paypal still have to conduct the usual KYC checks on the person, but how can you be sure you are sending it to his Paypal account? You'll be sending it to an email address...

He can send you a payment request, but I believe you need a card to make a payment against that, unless you have a Paypal account. The issue is opening the Paypal account for the charity might not actually be all that easy...

Countdown said:

Assuming that we just use our paypal account to make payment to HIM, can we just leave it sitting there empty or can the Russians or North Koreans or the Chinese hack into it and take out millions of pounds that the Charity is then liable for?

I have only used Paypal rarely and I don't know what the potential fraud risks are. As PH is a total font of all knowledge I thought I would ask.

Please dont post any passive aggressive responses. It's been a long day and the air conditioning on my car wasn't working.

You can disassociate Paypal from your account (card and bank) and/or request to close the account after you are done with it.

Your Western Union (or MoneyGram might be better as they are in Post Offices too) is the better idea. It's up to MoneyGram/Western Union or whoever you use to make sure it really is him that is collecting the cash. WorldRemit also operate in this space so you have a few options.

On balance I think Paypal will be too risky and probably quite hard to get an account for a charity.

[DSLiverpool]

He can send you a PP payment request you will need a debit card etc to pay it.
But as otters have said I’d tell them to FO
Can you send vouchers etc ?

[NNH]

OP - how much are we talking about? For a couple of hundred, I'd just go along with whatever mad scheme the grantee wants. For a thousand or more, I'd want to protect myself with a traceable transaction. If I were Treasurer, I'd be particularly bloody-minded about it.

I'm presumng that you have another job, and a personal reputation to maintain. If the grantee won't accept a bank transfer, I'd tell them that only a face-to-face handover of the cash in your charity's office is acceptable, with at least one additional witness. If the charity wouldn't back me on this, I'd quit.

Good luck, and please make sure you protect your own position.


Incidentally, for anyone interested, Paypal offer a debit card that draws from the Paypal account. We use it to give a low-stakes payment card to some of our employees who wouldn't qualify for a company credit card.

[Simpo Two]

DSLiverpool said:

But as otters have said I’d tell them to FO

Can't beat the wisdom of otters! They know a fishy thing when they see it.

[TonyRPH]

Countdown said:

<snip>

1. is it possible to pay via bank transfer into his PP account? I assume not, in which case

Yes, you can make a payment from a debit card.

Countdown said:

2. Will we have to open a Paypal account in order to make the payment? I think we will

You won't need a Paypal account - as per above, you can make a payment from a debit card

Countdown said:

Assuming that we just use our paypal account to make payment to HIM, can we just leave it sitting there empty or can the Russians or North Koreans or the Chinese hack into it and take out millions of pounds that the Charity is then liable for?

That will depend on how secure they are as Paypal users. Paypal has a couple of different authentication mechanisms and if those are used appropriately the account can be pretty secure.

The recipient(charity) of the funds probably has a personal Paypal account which if being used for a charity is in contravention of Paypal terms and conditions.

But that's probably how they are getting away without needing a bank account.

https://www.paypal.com/us/smarthelp/article/do-i-n...

Edited by TonyRPH on Tuesday 20th July 09:47

[red_slr]

NNH said:

OP - how much are we talking about?

This.

[Countdown]

Thanks for all the comments - just to advise re: some of the questions.

One of the problems is that he is of No Fixed Abode. This prevents him from opening a traditional bank account. Apparently HSBC do an account for the homeless but he says "Guv'mint wants to sell his data"

We can't give vouchers. Trustees think it's unfair and patronising to the grant recipients, they should be treated like adults.

It's £1,000 - I'm pretty sure he's unemployed so its not likely to be tax evasion. AIUI a one-off grant doesn't affect benefits (but possibly he's not actually ON benefits).

The purpose of the grant will have been to cover one-off welfare expenses. This could be anything from clothes, a deposit on a flat (if homeless), funeral costs for a dependant. Basically somebody will have put an application in on his behalf, the Trustees will have reviewed it and decided how much to award, if any.
h
Thanks again for all the information about Paypal. The latest situation is that he's agreed with a freind to use his friend's bank account. We just need to te written confirmation from both of them and then we'll do the transfer