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Digital Payment Regulations

Are NGOs required to perform KYC checks on online donors?

Yes, especially for larger donations. Under Georgian AML laws, NGOs fall under monitoring entities for certain transaction thresholds. You must have a system to identify donors (e.g., collecting name and ID number during payment) to prevent money laundering risks. Anonymous donations above specific limits are prohibited.

Can we use PayPal to receive donations in Georgia?

PayPal operates in Georgia with limited functionality. While you can send funds, receiving and withdrawing directly to a Georgian bank account is restricted for most entities. We advise on alternative payment gateways (like Stripe via intermediaries or local PSPs) that fully support Georgian banking integration.

What are the tax implications of crowdfunding?

It depends on the purpose. If funds are raised as charitable donations for an NNLE (Non-Commercial Entity), they are generally tax-exempt. However, if the crowdfunding campaign offers a product or service in return (reward-based crowdfunding), it is treated as commercial income and subject to VAT and profit tax rules.

Do we need a privacy policy for donation pages?

Absolutely. If you collect any personal data (names, emails, card details), you must comply with the Law on Personal Data Protection. Your website must have a clear Privacy Policy explaining what data is collected, how it is stored, and for what purpose, along with a cookie consent mechanism.

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Compliance with digital payment regulations is vital for NGOs that utilize online donations (crowdfunding) or engage in e-commerce. In Georgia, the payment systems sector is strictly regulated by the National Bank to ensure financial stability and prevent money laundering. Organizations that place payment buttons on their websites, collect funds through intermediary platforms, or plan to accept cryptocurrency are required to adhere to a range of legal requirements. This applies to both customer (donor) identification (KYC) and the security of personal financial data. Ignoring regulations can lead to blocked bank accounts and heavy fines.

Our service includes setting up the legal infrastructure for digital payments. Specialists offer:

  • Legal analysis of agreements with Payment Service Providers (PSPs);
  • Preparation of documentation (Terms & Conditions, Refund Policy) required for integrating electronic payments on a website;
  • Developing internal AML/CFT policies for digital transactions;
  • Establishing a legal scheme for accepting cryptocurrency donations (within existing regulations);
  • Addressing personal data protection issues when processing card data;
  • Ensuring compliance with currency regulations for digital transactions received from abroad.
This service allows you to implement innovative payment methods safely and legally.

Knowledge of digital payment regulations is essential in specific scenarios. For example, a charitable foundation creates an app where users can subscribe to automatic monthly donations. This requires legal documentation for "recurring payments" and proper user consent forms. Another example is an organization raising funds through a foreign crowdfunding platform (e.g., GoFundMe) — here, issues of transferring funds to Georgia and taxation arise. Also, more NGOs are interested in crypto donations, which require strict virtual asset conversion and identification procedures according to new National Bank regulations.

The legal framework relies on the "Law of Georgia on Payment Systems and Payment Services," which regulates the use of electronic money and payment instruments. Also important are National Bank orders regarding "Virtual Asset Service Providers" and "Strong Customer Authentication" (SCA) rules. Regarding personal data, the "Law on Personal Data Protection" applies. A lawyer ensures the harmonization of these technical and legal norms with your business processes.

The process begins with an analysis of the payment model. The lawyer clarifies: Are you using an intermediary? Do you store card data? Following this, compliance documents and agreements with banks or fintech companies are prepared. With the help of a specialist on Legal.ge, you will be able to use modern technologies without financial and legal risks.

Legal.ge gives you access to lawyers with experience in Financial Technology (FinTech) and the non-profit sector. The digital world offers immense opportunities for fundraising, but it requires a professional legal approach. Manage your digital transactions with Legal.ge.

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