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How should we take our commission payments?

Discussion in 'Payment Processing' started by InvestInPixels, Jan 18, 2013.

  1. #1
    Hi.

    This has been confusing me for a little while now. We're looking to allow our members to take payments. Our website allows members to list items and we take a % (commission).

    What's the best way to do this?

    My first idea was to have a wallet system, i.e. members pay straight to our bank account/paypal account, the money is added to their virtual wallet and when they want the money, they simply withdraw and it will go into their bank or paypal account. The problem with this is that we'd have to look after all of our members' money, and if anything happened, if we accidentally overspent, if there was a debt, we'd lose their money. Additionally, our bank would charge a fee to send money overseas.

    Another idea is to allow users to type in their Paypal address to receive payments (if someone doesn't want to pay with a paypal account, they can just use a debit/credit card via Paypal instead). This would work well, but if someone pays in £, and the user that receives the money is from USA, will they receive the money in $? Also, how can we take a commission this way? As I understand it, we can't - other than sending the user an invoice for the % after the sale, similar to eBay.

    Are there any other viable options? If you help, I'll give you a thanks & best answer!

    Thank you to everyone.
     
    InvestInPixels, Jan 18, 2013 IP
  2. InvestInPixels

    InvestInPixels Member

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    #2
    Any suggestions here? I'd really appreciate it and in a bit of a confused state at the moment.
     
    InvestInPixels, Jan 18, 2013 IP
  3. Kwikode

    Kwikode Active Member

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    #3
    Paypal accounts accept payments from any currency, and users can nominate the currency of their account, it will convert the currency automatically. The best way to take a commission from payments is the wallet system you described and get your users to swallow the bank fees and charges. A lot of banks include insurance againts fraudulent payments and withdrawls, you will just have to monitor closely the money going in and out of the account. You could also do this with paypal, make the money travel through your paypal account before it is withdrawn to the end user.
     
    Kwikode, Jan 19, 2013 IP
    1 person likes this.
  4. pamon

    pamon Well-Known Member

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    #4
    agree with paypal, globally accepted and easiest way to pay people
     
    pamon, Jan 20, 2013 IP
  5. SentoWeb

    SentoWeb Active Member

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    #5
    PayPal API can be integrated so that the seller is charged instantly after a successful sale, however this might not be the best option as very few people would actually give you their API details so that you can charge them anytime you wish (duh!). The best solution is to automatically send the invoice to them after the sale, you can use the PayPal IPN notifier link on the "Pay now" button so that your system receives a callback from paypal. You can send the invoice to their email address and insert the log into the database. You can enforce them to pay the commission by disabling their listings if the invoices are unpaid.

    Another interesting approach would be to make use of another interesting feature, you can turn off automatic payment accept setting and charge the seller the percentage however put the payment on hold. Upon a successful sale you can use PayPal IPN api to release the payment. This is a rather complicated however interesting approach to the problem, where both you and your users are safe.
     
    Last edited by a moderator: Jan 20, 2013
    SentoWeb, Jan 20, 2013 IP
    InvestInPixels likes this.
  6. InvestInPixels

    InvestInPixels Member

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    #6
    I'm interested in this bit:

    Is there a name for this? Does it need me to do anything manually? Does it hold the payment automatically? How can the payment be released? If the buyer and seller both click a 'complete' button on the website, will it release the payment?

    Thanks!
     
    InvestInPixels, Jan 20, 2013 IP
  7. SentoWeb

    SentoWeb Active Member

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    #7
    The setting which enabled you to "hold" payments after you receive them was under "Payment receiving preferences" however it is no longer here. I have checked the other setting groups but I couldn't find it, I am however confident that you can enable it yourself without calling PayPal.

    The process is used by a partner company which is selling virtual products and it works very well for them. The process in your case would be:

    1. User lists product A for USD X
    2. User is charged with the commission for product A however the payment is on hold until you accept it.
    3. You receive the payment from the user and using the class PayPal IPN notification system you store the transaction ID
    4. Scenario 1:
    * Somebody buys the product on the website and pays the seller (your user). You will have an IPN link attached to the "Pay now" button which tells your system that the seller has been paid for the product. You will use the PayPal API to accept the transaction. (you would already have the transaction id)
    * The product ends being unsold after x days. You can use the PayPal API to deny the payment, it is automatically returned to the seller.

    While this might sound a little bit complicated it is actually safe for both the seller and you. If PayPal can't enable the payment review setting for you it is also possible to accept the payment for the product and refund the seller automatically if it isn't sold, however sellers would no longer feel safe.
     
    SentoWeb, Jan 20, 2013 IP