I know many of you are going to instantly propose 2Checkout, or the like, however I am not 100% sure if this is the solution to my problem. If it is though, please do let me know Anyway, I have a business model where I will be selling items through my website. It will basically be a website that delivers goods only after payment is received. This way both the seller and the buyer get what they want. After a quick review of PayPal, which is what I initially was planning on using I found that charge backs are rather simple to do, and as a member of these forums pointed out PayPal often sides with the buyer. Now, normally this wouldn't be a problem. The problem arises when I allow my PayPal account to be a sort of "Middle Man" to hold the funds until the product is successfully delivered. Obviously this could pose some problems with the finances, as if a good is already delivered and payment has been made to the seller from my account, and then a charge back occurs I will incur the fees not the seller. So, I would like to know some other alternatives that could handle this for me without the worry of charge backs. Also, I would like it to have an API so that I may integrate its use into my software. Thanks
If you are in the USA try Google checkout. They go thru more hoops to verify a card before releasing funds to you. But they do hold the funds for 2 business days after you indicate that the item has been shipped. Every credit card merchant must allow buyers to initiate a charge back - it's part of their contract with the credit card companies. I'd be pissed if I found out that my credit card company did not allow me to dispute a transaction. Moneybookers apparently does not allow chargebacks but in this case they eat the expense themselves, pay back the credit card company, and do not pass it on to the seller - within reason.
Yea I also thought about using Google Checkout. I don't mind the chargebacks at all, in fact I am glad they are in place. If someone rips me off i'm going to obviously want my money back. I just want to ensure with the system I am setting up, that I will not be liable for items that are shipped and therefore will not incur the chargebacks at my expense, but rather the sellers (if in fact they sold a shotty item). So I suppose a better question would be how to have a system like this setup so that I don't have to worry about out of pocket expenses for peoples scams and what have you.
It sounds like you want to be an IPSP (Internet payment service provider). Most merchant account providers and other IPSPs (i.e. (some versions of) Paypal, 2CO, etc) won't support this business plan. You already have a number of individuals in a merchant account transaction and adding one more makes it a bit cumbersome and problematic. (Just look through this forum on how some people claim they have been duped by Paypal etc.) And adding another individual to this transaction just gets a bit more troublesome. If the merchant account is in Louis11 name, then all business conducted through that merchant account should be yours, and not anyone else's. Let's say that you become an IPSP and John Doe signs up for your service and claims to have shipped out thousands of dollars. If you send him the money and consumers do a chargeback, there is little chance you have of getting your money back. Don't be a part of the transaction. Let the companies that have already established their business plan as a transaction / payment processor do this.
Well I would like to have a sort of auction site for softgoods. So when a good is purchased it is automatically delivered, and payment is sent to the correct person. If I can stay out of the transaction process and develop an API to do this that would be perfect. However, as is the case with Paypal I don't believe I can do such a thing without having access to the account and verification. So is there anyway to verify both payment has been sent and that the softgoods should be delivered without being in the middle of the transaction process?
You can use e-gold as an alternative payment. But problem is your customers won't use Credit card with egold. But it's really best payment with no charge back method. All thing is get paid, stay paid and instant
Basically all you need is the email address for the merchant. And then direct the buyer over to the Paypal page with the merchant email's address. This way, it can all be controlled as well by the merchant
If you are really afraid of chargebacks then MoneyBookers is your best bet, but most of the people don't use it.
Yea I thought about that. I thought maybe I could automatically dispatch the soft goods (Zipped and password protected), and after payment is received the merchant can verify that payment has been received and the password for the Zip will be sent out. Problem with this is the Zip would likely be easy to crack, and therefore would compromise the integrity of the system. On the other hand, what if the merchant never checks their account and therefore can never verify payment receipt? In the ideal situation I want to do the following: - Buyer Purchases Soft goods - Payment is Sent by buyer - Payment is received by seller - Soft Goods are automatically dispatched to buyer - Everyone is happy Problem is, without the "Middle Man" scenario and working with the API on my account I cannot think of a valid way to verify payment receipt so that the goods can be sent. Chargebacks aside, anyone have any ideas?
Hi, Louis11. I am also searching for that kind of system in this cyber world. Just check Escrow.com. May be it will fit your needs. I have gone through it but their minimum charge is $25/transaction & this is simply not affordable by me for a $100 value of selling.
Yea I have a system already developed that will use my account for the "Middle Man" system... however I want to make sure that I am protected from incurring any possible chargebacks. So maybe there is a way to use the system I have, and if a chargeback occurs foward it to the merchant? I have looked into escrow.com, but the transaction fees are simply not reasonable for the type of goods that will be sold. PayPal would be perfect if I could only work out the kinks with the system.
But you also need to consider the ramifications of these chargebacks. They go against you, the merchant. And if it is a merchant account, excessive chargebacks can put you also on the TMF or MATCH list. And once on this list, you ight find it almost impossible to get a merchant account. The Paypal IPN should work fine for this. You just code it so it pulls the merchant's email address. Most gateways will offer some type of electronic software download (ESD) module as well
Yea I'm considering the ramifications, that's what this post is all about I want to be sure I don't have any liability when it comes to other peoples money. If I can get an Instant Payment Notification of the payment delivery for something bought through my site and paid to the merchants account that would be PERFECT. However, I am almost positive you can't do this on a remote account that you do not have access to. I suppose I can always just tell the users they have to setup their paypal this way... but if I am not mistaken, basic accounts do not have IPN functionality? And also, what exactly is this ESD you mentioned? Is this something offered by PayPal and how exactly will it help me? Thanks, Louis
Personally, if I think if you opted for manual vetting of the order before sending it, it would indeed cut down on the level of chargebacks and frauds. Most of the time, chargeback comes about because of stolen credit cards so if you manually vet the orders, you would be able to determine what seems suspicious. I find that although automated fulfilment has its placed, it does comes with its level of risks. Automated system can only go so far as to determine fraud, like checking to see if the credit card number has been blocked by the bank (ie the card holder actually reported his card stolen) or the country does not match the IP.
I agree with what some have said, PayPal has many problems and if you can use Google Checkout with the buyers then I would recommend that more. Also using PayPal IPN will not stop you from charge backs.
I appreciate much of the information many of you have divulged. It has helped me better refine the system that I have in mind. I have never heard the term "vetting" before. I presume you simply mean monitoring each charge? I spoke with a representative from PayPal today, and they informed me that for what I wanted to do there was no other way other than the "Middle Man" solution. And as we all suspected, that yes the person receiving the money is the one who is responsible in the event of a dispute or chargeback. Out of curiousity, how long does one have to file a chargeback or a dispute for an item?
Yes, what I mean by vetting would be to manually checking to see if each of the charge is authentic before sending your product. http://en.wikipedia.org/wiki/Vetting For Paypal, a dispute must be raised within 45 days from the time the payment is made. The seller would then have 20 days from the time of the dispute to provide evidences to dispute the dispute. https://www.paypal.com/helpcenter/m...ps=solutionPanels&solutionId=11941&isSrch=Yes
Depends usually on the issuing bank and type of card (credit card / debit card) and type of chargeback. Let's assume it is a credit card. Regulation Z requires card issuers to investigate and resolve a consumer’s claim that a transaction is in error. Consumers must notify issuers of the suspected error within 60 days of receiving the statement on which the alleged error appears. Association Rules that the Chargeback policies permit issuers to assist consumers who discover erroneous transactions for up to 120 days after the date of the transaction.
Yea, I also posted this over at the PayPal Development Community, and one of the members mentioned "API Access Permissions". I believe this could solve my problem I'm researching it right now to be definitive though.