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  1. #1

    check payment services and/or print/delivery services?

    I am having trouble finding much info on this, and I am hoping that some of you have some experience in this area.

    I am looking at building out a site that will involve taking in payment from people and then paying out money to other people. Volume will naturally start out small and increase over time.

    The intake side is obvious - merchant account, gateway, and all of that.

    My question is on the outtake. Does anyone have any experience with this? I'm basically looking at 3 potential options, all of which I would like to put in place to meet the user's desires:
    1 - paypal
    2 - ACH transfer into a user's account
    3 - print and mailing a check to a user (think like a simple rebate check, but not a rebate)

    On day 1 manual intervention may be ok (if necessary), but before long I would like to have this completely automated.

    This does not have to happen in real-time - i.e. a user does not need to click a button and have the process fire off - it can be batched nightly. Also, the solution/service does not necessarily have to be completely turnkey - I'm not afraid of getting dirty with some scripts.

    I would greatly appreciate any info on services for each of the three (or even a starting point). There seems to be very little info out there on this, and what i have found seems to be tailored to a larger scale. Printing/delivery services I have found so far:

    payformance.com
    cytech2000.com

    Or if anyone has any other recommendations or suggestions, please let me know. Thanks!

  2. #2
    Will you be paying like commision checks? if so, your best bet will be to get hold of a good program like Quicken and print laser/computer checks. Why? because you will need most of your time to built and promote your new website and won't have time to keep track of each commision check you'll be writing...also... when the tax season comes, having a program like Quicken (Intuit) filing out your taxes will be just a breeze!
    Avoid chargebacks, disputes, Ach and Paypal fees and let a good program keep track, automatically deduct from your bank account all checks, reconciliate etc etc.

    Good luck in your new business :-)

  3. #3
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    Welcome to the forums cman8!

    How much volume are you referring to and where are these people? You might consider a pre-paid / loyalty card type solution as well if your volume warrants it. You could batch the transactions nightly to the processor and the cards are automatically loaded. You can also check out the Check Electronification Solutions as well.

  4. #4
    erm... a quick screen through, seem like no product, just money scheme. thats banned by paypal. becareful if you going to run this business, might risk your account.

  5. #5
    Quote Originally Posted by Corey Bryant
    Welcome to the forums cman8!

    How much volume are you referring to and where are these people? You might consider a pre-paid / loyalty card type solution as well if your volume warrants it. You could batch the transactions nightly to the processor and the cards are automatically loaded. You can also check out the as well.

    Thank you!

    I've been reading through a lot of your forum history - very informative! I'm sure I will have more questions in the future, and you all seem like a great resource.

    To answer your questions - US based to start, and volume will ramp up over time. It may be as small as a couple of hundred per month in the first 1-3 months, but within a year I hope/expect it to be into the thousands per month. There seem to be services that do high volume, but it's the firsts few months that are the trickiest. It's going to be a new service of course, so it's hard to say precisely.

    My service is basically acting like a broker between two users - but the money cannot be exchanged directly between the two users - it has to go through my company. My fees will cover the cost of doing it this way.

    My current thought on the matter is to offer the option of payment via ACH, paypal, or mailed check - with the hopes that most people will choose the first two. At small volume there is of course the option of printing the checks myself.

  6. #6
    Quote Originally Posted by James79
    erm... a quick screen through, seem like no product, just money scheme. thats banned by paypal. becareful if you going to run this business, might risk your account.
    Hi - I'm not sure precisely what you mean. My product is a service connecting buyers and sellers - it's definitely not a money scheme.

  7. #7
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    Thanks cman8. It really sounds like some type of loyalty card type system would suit you - or a pre-paid card - that way, you can control what monies are deposited to that particular account. It sounds similar to what EasyTel has set up. They use the LinkPoint gateway since it is one of the few that supports IVR.

    I think what James79 was saying - you have to be very careful with the wording - don't look like you are using a merchant account account so that I can accept credit cards. That would be an example of factoring and processors won't support it. I think I understand your business plan but you just have to be careful of the way it looks to people.

  8. #8
    Quote Originally Posted by Corey Bryant
    I think what James79 was saying - you have to be very careful with the wording - don't look like you are using a merchant account account so that I can accept credit cards. That would be an example of factoring and processors won't support it. I think I understand your business plan but you just have to be careful of the way it looks to people.
    Can you explain a little more?

    I think I get what you're saying and I can't imagine this being a problem for me. A very close example to the kind of setup I'm looking to do is odesk. (In fact, financially it's almost identical) If you're not familiar, it's a site that connects programmers/contractors and companies. The company pays odesk directly with a credit card they put on file, and then odesk pays out to the contractor on a weekly basis via ACH in the US (or some other paypal-esque services internationally). Odesk takes a cut off the top as a commission, and provides some services between the two parties - but 99% of it is directly between the buyer and the seller.

    Which brings up a question - who is a good/recommended company for ACH payments? (Not accepting ACH, but rather paying out via ACH). Most gateway/merchant sites I find are all about intake. Do they all do it, but just not advertise it heavily?

    Thanks a ton!

  9. #9
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    Well it is very tricky - that is all I can really say. You don't want to look like an aggregator - meaning you are accepting credit card transactions for a third party. Most companies are not set up to do this and since Visa changed the rules awhile back, it is even more difficult to get one.

    You basically need to look like you are providing the service to your merchants.

    Taking money out of a bank account is easier than putting it into a bank account. You don't want to look like a Fiscal Intermediary. For example, a few years back, I was consulting with a healthcare organization to do electronic claims. They would pay the claims to the physician and the insurance company would pay the company. However since everything was going through ACH (governed by NACHA in the US), there were about 30 states that the company had to register in to become a third party payor ($10,000 in each state).

    Consider Starbucks if you will. They have a program where you they give you a card - a card that is used at most of their locations. This card can be loaded at anytime via their website with a credit card for a specific amount of money.

    First Data is one of the companies that will set up ACH for you. I consulted for another company that basically used First Data to pay their employees. I would create a file - upload it to First Data and they would take care of the rest.

    A loyalty type card program though would be interesting for you. More marketing - look at what Paypal is doing with their security key fob. That technology has been around for ages but it is more marketing than anything. You carrry your keys everywhere and now that key fob will probably be show to millions. The loyalty card can work the same way. You set it up so data (money) is transferred to it and the users can use it potentially anywhere you want and you can usually choose some places (like gas stations) if you don't want it used there

  10. #10
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    To answer your question on recommended ACH processors, AllianceACH.com is one option that you may want to consider. We have used them for years for our ACH commissions and it has worked out very well.
    CDGcommerce.com - Trusted Merchant Account Solutions since 1998
    Many thousands of successful, growing businesses benefit from our expertise every day. You can, too!
    We help merchants to eliminate gateway costs, reduce & mitigate fraud and achieve streamlined PCI compliance.
    Learn more today at http://www.cdgcommerce.com - we look forward to helping your business grow!

  11. #11
    Quote Originally Posted by Corey Bryant
    A loyalty type card program though would be interesting for you. More marketing - look at what Paypal is doing with their security key fob. That technology has been around for ages but it is more marketing than anything. You carrry your keys everywhere and now that key fob will probably be show to millions. The loyalty card can work the same way. You set it up so data (money) is transferred to it and the users can use it potentially anywhere you want and you can usually choose some places (like gas stations) if you don't want it used there
    The loyalty card thing is an interesting concept, but I don't think it will apply. The average transaction will be over $100, with many going over $1000. I don't see people pre-loading that much money on there.


    I think I get what you're saying now about the financial aggregator. That is definitely not the case. We are basically modeling the previously mentioned odesk, or Amazon's mturk service. In both of those cases, handling the money is just one of a number of services that either odesk or mturk provides to help both the buyers/sellers connect to each other.

    (Thanks for your patience, by the way... I'm learning as I go here...)

    So - allow me to sort of take a step back and summarize. Let's say I am creating a carbon copy of odesk. For now, let's say it is catered only to US customers. (Also, FYI, this is not at all anything illegal/adult/etc)

    Transaction flow:
    Step 1 - I want the seller/provider to put their "service widget" up on the site.
    Step 2 - I want a buyer to purchase the seller's "service widget" with a credit card, paid at time of checkout.
    Step 3 - I want the seller/provider to receive the payment via ACH, over time, as the services are delivered. The ACH payment to the seller/provider could be anwhere from a few days to a few weeks after the transaction. (It would be after completion of services)

    For step 2, I believe I just need any ordinary merchant account and gateway, or google checkout or something.

    For step 3, I believe I need some sort of backend nightly batch processing system to pay out via ACH, definitely not in real time.

    I checked the First Data link in your sig - I don't see anything on the site about paying out via ACH. Do you have a link to some hard info on it? Or can you at least give me a rough cost? (i.e. 1% per transaction, etc.)

    Based on your knowledge, do you think I am oversimplifying or missing anything here?

    Thank you so much Corey!

  12. #12
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    I understand what you mean - at least I think I do

    I was actually referring to you, yourself use a merchant account, and the the providers get their money to them via a loyalty card type situation.

    The program seems similar to one that I consulted for last year. Thet user decided to just get each seller / provider to get their own merchant account account. This way it takes a lot of the risk off of you. Because you will be accepting payments via a merchant account for someone for someone else.

    It is very tricky and I would really have an attorney review everything. Visa / MasterCard does not ever hardly make new rules - they reinterpret the existing ones (every April and November usually).

  13. #13
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    Sorry - probably gift card. Loyalty card - some will use the same platform but gift card might be somewhat better.

    You can take a look at their solutions which might offer a few different choices.

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