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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
    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,
    www.chrisranjana.com

  5. #5
    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?

  6. #6
    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.

  7. #7
    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?

  8. #8
    SitePoint Addict Jonny's Avatar
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    I spoke to a solictior friend of mine tonight, to discuss whether I'd be allowed to do what I described above. I was told it was irrelevent because the risk of dealing with other people's money like that, without a great deal of financial backing was far, far too much.

    Are there any other ways to do this, so that a customer can sign up for a shop without having to link it to a merchant account themselves? Is it possible to create a new account on the fly?

    I'd appreciate any thoughts.

  9. #9
    SitePoint Evangelist
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    Your idea is to minimize as much hassle as you can, right?

    If allowing them to use your merchant account isn't feasible (it sounds like that's what people are saying), the next best thing might be to make it as easy as possible for them to get one.

    You could 'hold their hand' through setup with a 3rd party provider (like PayPal or 2Checkout). Or what about joining up with a company as a reseller, filling out as much of the customer's application as you can, and have them sign it?

    -Costas

  10. #10
    SitePoint Addict Jonny's Avatar
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    The idea is not only to minimise hassle, but to make it as straigtforward as possible for people with only very basic computer literacy. Most people know how to enter their bank details for example, however not so many understand what it takes to purchase a merchant account.

  11. #11
    SitePoint Evangelist
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    So what about making it easy by taking as much of the load as you can for them? (ie- fill out most of the app. and let them enter the bank information.)

    -Costas

  12. #12
    SitePoint Addict Jonny's Avatar
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    I've had a think about this, and as you've said, become a reseller. How exactly does this work, though? Can I do it seamlessly, i.e as they fill in a form on my account; it automatically signs them up to the merchant?

    I'd appreciate any help.

  13. #13
    SitePoint Addict Jonny's Avatar
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    I've been thinking a lot about this. Does anyone know how Cafe Press organise their payment system?

  14. #14
    SitePoint Evangelist
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    Quote Originally Posted by Jonny
    Can I do it seamlessly, i.e as they fill in a form on my account; it automatically signs them up to the merchant?
    It's not quite that simple, but you got the basic idea. I signed on with CDG Commerce (www.cdgcommerce.com) a few months back and it's been working out great.

    -Costas

  15. #15
    O Rly?? JakeJeck's Avatar
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    So you want to do what Yahoo does with "Yahoo Stores" basically?

  16. #16
    SitePoint Addict Jonny's Avatar
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    Quote Originally Posted by firehous
    It's not quite that simple, but you got the basic idea. I signed on with CDG Commerce (www.cdgcommerce.com) a few months back and it's been working out great.

    -Costas
    Thanks firehous, I'll give them a try.

  17. #17
    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?

  18. #18
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    hmmm
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