I am looking to add a PayPal donate button on my free wordpress.com blog. I am not sure whether -
This is possible and allowable.
If it is allowable what do I need to do to make it workable and any tips that people would like to share.
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Yes, PayPal provides information on how to create a donate button on this page.
Prerequisite: Assumes you have a PayPal Business or Premier Account
Wikihow also has a short guide on setting up a donation button.