

Credit card processing Many-to-One relationship  - falsestprophet

Is there a good way of moving money from many people to one person (who isn't the host of course)?<p>If the amounts were small and numerous enough, it may make sense to simply direct most of the payments between the parties and  siphon off your cut with several payments. But this is an ugly solution.<p>If the amounts were few and large, this solution is not practical. As  far as I can tell, the only alternatives to the small e-businessman are using paypal and being charged twice (once for accepting from one party and another time for pushing to the other), or (somehow) negotiating with a bank to get a merchant account (at great expense I imagine) that charges a little bit less for the same solution.<p>My goal is to minimize the amount paid to credit card processors while taking a small cut.<p>Do any of you know anything about this?<p>Thanks.
======
epi0Bauqu
Can you give a particular scenario? And is your goal here to make money while
at the same time making it simple, or just to make it simple?

~~~
falsestprophet
My goal is to minimize the amount paid to credit card processors while taking
a small cut.

~~~
epi0Bauqu
Well, without knowing too much, here are a few thoughts for you. First, you
probably want to hold all the money, i.e. take it from all the people first.
The reason for this is you can float it while you hold it. Even if it ends up
being only a couple of days, this will add up over time and enable you to take
a small cut without seeming like you are taking a small cut. You can turn this
into clever UI by having a screen shownig that you are waiting on these people
before you can release the final payment or something like that.

Secondly, I'm pretty sure with the right processor you can credit a card for
whatever amount you want, even if you haven't charged it, i.e. separate from
any transaction. This depends on the processor but I think I have seen this
before.

Finally, if the one person is OK with a check, that hardly costs you anything
as most of the check processing system is subsidized by the federal
government. Similarly, you might be able to get lower rates on incoming
payments using EFT. At the same time, you can keep the cut small but you take
home a higher portion because you aren't paying the credit card processor most
of it.

~~~
falsestprophet
What sort of processor do you mean? A bank or a paypal operation or something
else?

I cannot find any automatic check processing services, have you heard of any.

~~~
epi0Bauqu
Is this just a one time thing--or is this around a business where it is going
to be happening all the time?

By processor I mean a credit card processor like Paymentech or Verisign or
Cybersource. Paypal offers most processing and bank functions, but you pay for
it and are forced into their API. Most of the major processors now have eCheck
products, though I haven't used them and am not sure on the pricing, but it
should be less than credit cards.

On the backend (you sending the one payment) I meant just doing an electronic
bill pay from your bank account where they send out a paper check. This is
usually free for you on a small enough scale. And it would further extend the
float period.

------
mm
are you doing something similar to fundable.org? What not try the simple
method?

Let all the payers transfer the money directly to that one person. Then, you
send an invoice to that one person for your commission and trust him to
actually honor the invoice.

This is what Ebay does and it seems to be working well enough.

~~~
falsestprophet
That makes a lot of sense, but I did not think it was easy to transfer the
money directly to someone else. When people collect with ebay they are forced
to sign up for a paypal account.

This does lower the cost, but it I think it significantly raises the
transaction activation energy.

Am I wrong?

~~~
mm
Yes. Fundable forces users to sign up for a paypal account or pay by check. It
does raise the transaction activation energy but i think this is the best way
to circumvent the double-fees problem.

