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Thread: Legal Question

  1. #1
    SitePoint Addict Jonny's Avatar
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    Legal Question

    Okay, I'm trying to do something as part as a project I'm working on, but I'm not sure whether I'm going to struggle to do it legally.

    I want to provide customers with a complete e-commerce package, including hosting, shopping cart and payment processing. What I was originally hoping to do was use one central merchant account, my own, and then distribute the funds earned by each customer accordingly.

    I understand however that I am not allowed to do this. It's called 'aggregating', and payment processors won't have it.

    Is there another angle I can look at this from, for example if I were to offer a service whereby they use my platform to sell products, the money comes to me and then I pay them a 'commission' (Which would be 100%). Whilst it is essentially the same thing, can I use the leagal policies to my advantage in order to this?

    If not, any other ideas would be greatly appreciated.

    Thanks.

  2. #2
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    beley's Avatar
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    Usually, if it seems like you're doing the same thing as something illegal in a different way to get around the law, a judge will usually find that it's still illegal. IANAL, but I think you might want to talk to one before going forward.

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    SitePoint Enthusiast angelos's Avatar
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    If you want to know an answer for a legal question it seems proper for you to address to a relevant attorney or an official. Any comments one can provide here for your post might do a bad service as you may then follow an amateurish advice that could turn out absolutely wrong.
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    SitePoint Member Laker_Fan32's Avatar
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    You would definetly want to speak to a lawyer, but also speak to Merchant service providers and be honest...I'm almost positive you will find your answer there...

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    While I agree that it is good to seek appropriate advise - this isn't a huge legal question nor is it impossible.
    Jonny - you would just need to set up a company that purchases the goods from all the "vendors" - then you can get an account, take transactions and then pay your venders at an agreed price. There are many many examples of online malls that do just that.

    Ulrik

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    Texan at Heart Corey Bryant's Avatar
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    Actually without the processors knowing it is called factoring. There are some hosting companies that do this today still knowing how much it is against their merchant account agreement.

    Consider becoming an affiliate or a reseller for merchant accounts instead. That way you stay above aboard and your clients do as well.

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    What I suggest isn't factoring at all - its simply setting up a wholesale arrangement. Do you think that Amozon is "factoring" when they sell another company's product and it gets billed through them? His questions was how to do something under a particular scenario -

    Cheers

  8. #8
    Texan at Heart Corey Bryant's Avatar
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    If you do not tell the MAP what is actually happening - it is factoring. The MAP knows about Amazon, 2CO, etc and that is aggregating. A slight different but it is there.

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    i wouldn't be going to an e-commerce forum for legal advice.


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