HN Explorer

Ask HN: How can I process payments for other people?

7 points by wdewind ↗ HN
Hi HN,

I'm trying to build a service where I need to be the middleman and charge a customer on behalf of another merchant. Have any of you done something like that before? What's the best way to do it?

Should I be charging people, putting the money in my account and then making a separate transfer for the same amount to them?

7 comments

[ 4.3 ms ] story [ 34.8 ms ] thread
saifa
Good question i will follow it! Interesting to hear the suggestions. That looks like you are doing a daily deal thing!?
wdewind
more like shop of shops, but similar
tiffani
Definitely don't do that (putting the money in your account and then transferring it to others). At one point, I was in the process of doing just this and once I talked to Braintree, for example, they let me know how horrible this can turn out to be. They gave me a term for it which I'm now forgetting. In any event, Braintree as the payment processor, also let me know that I'd be violating their terms of use (along with those of PayPal and various other payment processors) if I did process payments on behalf of other people.

Besides being a violation of their terms of service, it leaves a huge liability in your lap. If, as an example, you're taking payments on behalf of Person A and Person B who gave you money to give to Person A suddenly wants the money back that you gave to Person A, how do you handle the case where Person A is nowhere to be found? You're on the hook for that money and now, multiply that over the course of several instances of refunds and disappearances--it could be costly and problematic.

To mitigate this problem, PayPal introduced Adaptive Payments where you can have someone pay you and you share that payment with others. That's one way of dealing with it.

https://www.x.com/community/ppx/adaptive_payments

If you don't have to "touch" the money yourself, there's no problem.

ig1
This. I was looking at this and came to the same conclusion.

Either use PayPal X, or split the deal into two transactions, one where the end merchant gets paid and one where you get paid (either by the user or the end merchant).

The only circumstances I'd use the route suggested in the OP would be if the merchants provided the goods/services upfront removing risk from one side of the equation. In which case you'd be behaving like a retailer, purchasing goods from your suppliers (the merchants) and selling them to your customers.

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owkaye
Are you trying to become a "merchant middleman" who buys items for resale to the customer, or are you instead attempting to provide the credit card charging service for the other merchant?
owkaye
No answer so apparently the OP has lost interest or obtained the answer he/she was looking for.