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  1. #1
    SitePoint Addict Jonny's Avatar
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    Is this possible?

    I'm toying with an idea here, but I'm not a programmer myself, so I'm not entirely sure whether it's possible, or even if it is, if it's legal too.

    I would like to setup an online shop that sells, well, online shops. A user comes along, signs up and straight away get's an online shop. Rather than them having to pay for, and set-up their own merchant account, could all customer transactions go through one central account?

    So basically, when a customer's shop sells something, the money is deposited in my account, before instantly and automatically being transferred to their own bank account?

    Is this possible, legal and will the merchant's allow me to do this?

    I'd be interested to hear any thoughts on the subject.

  2. #2
    Geek of all trades ... GORF's Avatar
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    2Checkout.com does this.

    Read how here .

    See the products that they "distribute" here
    http://www.tonsofwebsites.com Hosting Tons of Websites for years
    http://www.cpanelbuys.com Buying cPanel hosting companies
    http://www.namesvibe.com Cheap domains - Good vibes!

  3. #3
    SitePoint Zealot mcrazor's Avatar
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    This is called aggregating and is no longer allowed by the credit card companies. The idea you have is to become a third party processing company, just as 2CheckOut is legally speaking. In order to establish that, you will need an acquiring bank that will back you up, but be sure to bring lots of cash. Most banks want a down payment to cover for eventual losses. Be prepared to have at least 500k available and of course, some ideas to run the business.

  4. #4
    SitePoint Addict Jonny's Avatar
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    Quote Originally Posted by mcrazor
    This is called aggregating and is no longer allowed by the credit card companies. The idea you have is to become a third party processing company, just as 2CheckOut is legally speaking. In order to establish that, you will need an acquiring bank that will back you up, but be sure to bring lots of cash. Most banks want a down payment to cover for eventual losses. Be prepared to have at least 500k available and of course, some ideas to run the business.
    The situation would be as follows, could you explain if this makes things any different?

    I would be using one central merchant account, from somebody such as 2Checkout. I am aware companies such as 2Checkout impose a delay on any payments made into an account, for example if I have an account and someone pays $50 for an item, I would not be able to 'cash' that money for say, 30 days.

    As long as I imposed a similar delay on the release of funds, would I not be covering myself, and therefore not need the aforementioned 500k as a fallback, given the risk would reside with the merchant, not me.

    If this is still not 'okay', is there any other way to get around this, as it is rather pivotal to my business plan?

  5. #5
    SitePoint Zealot mcrazor's Avatar
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    Well, in my opinion, the bank will always ask a huge deposit, no matter if you delay the funds for 14 days, 21 days or even 6 weeks. The bank knows that they will have a 180 day risk period for credits and chargebacks and they will always calculate that risk for a worst case scenario point of view, meaning they will always ask theirselves 'okay, what is our liability if this guy decides to take the money and run?'

    Normally, they will require a security deposit of 10% for 6 months.

    Nowadays, it is very hard to become a payment service provider, especially with the new PCI Security Standards.

  6. #6
    SitePoint Addict Jonny's Avatar
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    I see your point, but I wouldn't be the payment service provider. 2 Checkout, or another similar company would be, I would be merely selling products on behalf on my own customers, before transferring the money straight to them individually.

    That seems different to the example you've provided, would I not get away with that?

  7. #7
    Web development Company chrisranjana's Avatar
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    I'm not sure about the legal ramifications but instead of users dealing with real money can they instead buy points from you and use them to purchase items in the shops hosted by your website ?
    Chris, Programmer/Developer, Chrisranjana.com
    Chennai, Tamil Nadu, India.
    Php Developers, Ruby on Rails Developers

  8. #8
    O Rly?? JakeJeck's Avatar
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    So you want to do what Yahoo does with "Yahoo Stores" basically?

  9. #9
    SitePoint Addict Jonny's Avatar
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    Quote Originally Posted by JakeJeck
    So you want to do what Yahoo does with "Yahoo Stores" basically?
    Could you enlighten me, please? What exactly do Yahoo do with Yahoo Stores?

  10. #10
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    hmmm
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