Best way to pay users
Lets say I make the next google ads service (hypothetically speaking), how can I pay my users in more or less real time? with minimal or no additional cost to the company.
4 Answers
You can't. Not both in real-time and for (near) free.
Distributing payments always has a cost. This is part of the reason why micropayments still aren't doing much (the processing costs as much as the payment) and why there is a billion dollar merchant services industry.
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bill i think he is talking about paying out versus charging in. In this scenario the expenses are a lot less, mainly due to the lower risk involved and not dealing with MC Visa interchange rates + markups. There are a lot of ways to pay via ACH, paypal makes it simple. Even sending out checks is not that expensive. – Frank 14 years ago
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True, but "real time" and "cheap/free" are at opposite ends of the scale. Checks are cheap (basically just postage), but far from real-time. ACH's are fast, but not free in most cases. You're basically going to incur a roughly 5% hit for doing any payments in near real time. – Brian Karas 14 years ago
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Brian, ACH does not have a % fee, its just a transaction fee. Can be as low as .50 cents depending on the service you use. You could do real time ach transactions, but it doesnt make sense for an ad platoform. If i had a product where an affiliate would earn $200, i would ACH that immediately to build some sort of Moementum. All can be done via API. for ad platforms you let the money add up in real time in the users account, then offer cash outs. Most publishers dont mind paying a small $1 fee to cash out, or $5 to cash out by check. This is how we pay our affiliates, and none complain – Frank 14 years ago
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Right, ACH is cheap, but if you're doing payments in near real time, you will likely be doing smallish payments. Maybe on the order of $10-$20 if you're lucky. Even a 50 cent fee gets to be a decent percentage if your payments are not all $100+. Of course, based on the OP, we have no real idea of volume or size so it's hard to comment or give precise suggestions. – Brian Karas 14 years ago
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Agreed, cannot be done real time for an advert platform. – Frank 14 years ago
The most common approach is for you to keep account of your users earnings in a DB. Once those amounts are high enough, then you could do a Paypal to Paypal transfer. This can be done via API, and costs you very little, (just a transaction amount).
For countries where they cannot "withdraw to local bank" then your options are payment debit cards such as payoneer.
If your users are just in the US, then I would avoid payoneer because their rates are expensive. in that Scenario you could still offer debit card payments. I think the pricing is $5 per card, flat (thats the best i have found). You still would have an expense of loading the cards, this is done through ACH, and costs again only for the transaction amount.
Make sure that you require 1099 from those getting paid.
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Aren't paypal to paypal payments supposed to be free? – Nami 14 years ago
I think fees will be the least of your worries. Fraud is what will cost you. If you pay in real time, fraudsters will work you over before you realize you have been taken. A grace period gives you a little time to weed out the ne'er-do-wells.
The lowest fees are for ACH (Automated Clearing House) credit (meaning from your biz account to clients account) transactions. Also you can have service where the payment processing company will tear paper checks for your for monthly fee.
paymentsgateway.net - is one of the ACH credit processors. Check out their fees page.
Amazon Payments allows sending money but not via API yet. They have a lot lower fees than PayPal.
BTW, you would need to hire developer to integrate API for the ACH on your site.
Also PayPals new Adaptive API allows for specification of who will pay the fees.
