Trying to determine best course of action for a group appreciation and giving site

[jcmatador]

Hi, 

We are trying to determine the best course of action and cannot seem to find a clear answer to our question. 

We are building a site that enables room parents to share their appreciation for teachers (and others) and, if they want, contribute towards the gift for that teacher.   We are trying to determine the right way to implement this with PayPal to avoid as few problems for the users as possible.

So, each group will have one room parent who is responsible.  They will have a paypal account if they want to receive money towards the group gift.  Other parents can choose to pay manually or click on a PayPal link to pay via credit card towards the gift.

This is a person to person transfer.  Nothing is being sold.  We are simply trying to make it easier for the group leader to get contributions from the other parents.  

So the Buy Now button doesn't seem to apply and can cause problems if the parent doesn't have a premier or business account (which we cannot be sure they will have). 

The Donate button doesn't seem like it is appropriate since it appears that restrictions are getting tighter about who can and should use it.  No one involved is associated with a non-profit - we are just not buying and selling stuff.  

We don't see any easy way to put links that allow person-to-person transfers to happen.  

We are considering using WePay instead since they are set up for this but we felt that more people would already have PayPal accounts.  

What recommendation is there for us to use PayPal to help others collect payments for a group gift?  What approach should we take that will limit the problems each parent will have in collecting the money from the other parents?

Thank you so very much for your help.

-jc

[snowshoe]

Although the concept of what you want to do sounds easy, the process behind can be a bit more complicated.  Also, as no items are sold, if you would like people to use credit cards, there are fees and other things to consider. 

This thought is probably overkill for your project:

PayPal has a feature called Adaptive Payments. The Adaptive Payments API allows merchants and developers to pay almost anyone and set up automated payments. They can create applications that manage payments, payment preapprovals, and refunds. They can also send money peer-to-peer, split payments in both parallel and chained models, accept guest payments, and schedule disbursements. The Adaptive Payments API works on multiple platforms including the web and mobile environments.

Having said all that, most likely you will need a developer who can customize the APIs for your needs.  You will also need someone to manage the main account and decide on who pays the transaction processing fees.  Adaptive Payments are used by many businesses. For example, market sites and auction sites use adaptive payments. The site does the work and then distributes the funds back to the individuals.

You could simply the above, no automation, etc. by having one site or web page where everyone can come to and use a Buy Now type function (Donation won't work).  Again someone needs to manage the account and you still have to deal with transaction processing fees.  From there, that person would then distribute the funds manually using the send money feature. 

With either of the above two thoughts, there's the tax issue to consider.  Although you're not selling anything and you're not a non-profit, you're dealing with a 3rd part transaction processor (PayPal)   Let's say you're volume is over $20,000 and had over 200 individual transactions, now someone is responsible for reporting taxes.

Without having a central account and someone to mange it, there's not too many ideas left other than require everyone to have a PayPal Account and use the send money feature.   At least there's no tax issue, processing fees and no need for management.

[jcmatador]

Snowshoe,

Thank you so very much for your quick response.  As you say, it seems like this should be easy but there doesn't appear to be a simple way for us to facilitate it.  We don't want a central account responsible for taking the money and then redistributing it as that puts us in the middle and we become another layer of possible issues.

Since the majority of people will not have paypal accounts but they will have credit cads, we want to facilitate the payment via credit card.  We would be okay using the Buy Now button but from what we understand, that would require the person receiving the money to have a premier or business account.  I don't think we can require that.  It will just add a possible level of confusion for people.  

Is there any Buy Now button or link equivalent for people who are transferring money from one person to another and want to pay via credit card, are willing to pay the credit card processing fees, and who may only have a personal paypal account?

[snowshoe]

The Send Money option does not have any features that work with links or buttons. 

Unfortunately, this option can only be used from within one's PayPal Account.  Everyone would need at least a Personal PayPal Account to use this feature.  You can use a credit card as funding source to send money.  Because the source is a credit card, there is a processing fee, that fee can be paid by either the sender or receiver.

In order to be able to accept credit cards using an item button or link and not require the donor or customer to have a PayPal Account, you would have to have either a Premier or Business Account.  Premier accounts are just a step up from Personal Accounts, the requirements are similar.  The main difference is Premier accounts allow you accept credit cards whereas Personal Accounts were intended for folks who like to shop online or want to send money to friends or family.

Sorry, there's not an ideal solution or one that's without some cost and management.  I think you have a great idea for your project, it's just finding a way to make it work.  Whether you use PayPal or another service, there's still trade offs.

[jcmatador]

Though that is not the answer we wanted to hear, at least we have confirmation of the challenges we face.  

Thanks again for your very instructive and quick replies.  I really appreciate it.

-jc

[snowshoe]

[brewhardware]

Just thinking out of the box a bit, but if you have a PTO for the overall school, it should be a registered non profit. Set up a paypal account under that name and then create individual buttons for each teacher. The money gets transfered to the main account for the PTO treasurer to handle (it's best to give other people view access to this account for transparency. Perhaps at regular intervals, the treasurer dispenses money for each of the teachers (through the class parent). Since the donations would be driven through unique buttons, it would be pretty easy to pull reports to figure out the amounts that were donated for each teacher (see pivot tables through MS Excel).