I was looking into what exactly I would need to start something similar to paypal. It is actualy alot different as I wouldnt need as much functionaility, it would be geared towards a particular niche. Basicaly what I would want is where users can load cash via credit/debit or a bank account and use it directly with certified merchants. would be limited merchant wise to said niche, but users would prefer global. I know theres a turnkey site somwhere similiar to this though cant think of the link, maybe it would give me an idea. What are somethings I would need legaly. What kinda capital would I need for delays in banking, etc.

Quite a bit of capital plus your financial background and your partners would have to be emmaculate. And finding a bank to underwrite your account is quite difficult. Most acquiring banks wil not touch IPSPs because they do not know where the money is going or coming from. They do not do a credit or background check on the users & they rely on you.

It would be a lot of hard work. But I remember seeing a script that works just like PayPal on Hotscripts.com for about $100.

heh thanks guys I cant understand why they would make an easy to use script if it were so hard to do...Anyone have experience with something like this?

Making a script to be similar to Paypal? Maybe someone was bored or thought there was a market for it. And they did not actually check into the feasibility of the business. A lot of people have ideas of grandeur but making it work is a different story

Well correct me if I am wrong but wouldnt it be my merchant account accepting credit cards(many people do already) and my bank account doing debits and transfers? Im not talking of making a financial institution im talking about a third party payment service.

Yes it would be your merchant account, but you cannot "process" credit cards for other people or other businesses. This is factoring. And most acquiring banks are not set up to allow you to aggregate funds either.

What would the terms be? what I was saying is I accept 20 dollars into there account via credit or debit then credit there account with 20 dollars, they send 20 dollars to there merchant of choice via there account. I would be basicaly taking payments from them and send payment to merchants.

That is factoring. You cannot do it. You do not have the authority to do something like that. When the processor finds out, your funds will be frozen, your account terminated, and I doubt any processor will ever give you a merchant account again.

You are not set up to be an acquiring bank to do what you want to do. You want to hold people's money, transfer the money to them, etc.

corey I appreciate all you're help do you have any links explaining the process or these rules?

Not really - because they do vary from acquiring bank to acquiring bank. Most will say they do not accept IPSP (Internet Payment Service Providers). That is the "key" word that you are basically looking for. When we were doing something similiar, it honestly just became too much of a pain for me

Well this is something I would be willing to invest alot of money into, but need to do some research first of course. I would also use very strict anti fraud measures (for my own safety). Would going through an offshore bank simplify things?

You more than likely would have to. The reason most do not do this is because the acquiring banks do not know where the money is going or what it is being used for. With the Patriot Act in this era, I doubt any US bank would even touch it. An IPSP can be a great money laundering company these days.

Also - most acquiring processors will not touch certain businesses, but opening an IPSP, the IPSP can (even though it might be against their AUP). As you can see, there are so many ifs in this particular arena