PayPal to the Rescue
Amigo is a tricky beast as we’re not only accepting payments, we’re also paying people. Here’s how it works:
- Person A pays Carson Systems (Amigo) with their credit/debit card. We use Secure Trading’s XPay module to do this.
- Carson Systems generates an invoice (marked paid) and emails it to Person A
- The money goes into Carson Systems’ bank account
- Carson Systems uses the PayPal API to pay Person B
The last step is the really tricky one. Watch the video to see how we solved it!
RSS readers, view the video here.
You say that paying £5k to get set up as a “trusted software partner” was too expensive. I gather that the PayPal side of your solution is free, but what’s the initial outlay on the Secure Trading side?
Comment by Tom — May 29, 2006 @ 8:55 pm
Hmm, that’s an interesting solution (to use paypal) but will your customers be cheezed off at the 2-3% processing fee that paypal will charge on the receiving end?
Comment by Fred — May 29, 2006 @ 9:12 pm
I used paypal a while ago, it’s cool but for some strange reason, there is a bunch of people out there who don’t even know it or didn’t even got an account yet.
That said, I will introduce myself: I’m Javier from Argentina; I’m doing a web application too here and I saw your blog and I liked the idea of doing a blog about the current development, so I chatted up with my fellow partner developer and we decide to go for it; you may have put a new bloging use out there for all of us!
Take care and good luck with Amigo!
Javier Cabrera
Comment by Javier Cabrera (15tags) — May 29, 2006 @ 10:17 pm
It sounds sort of like you’re talking about an affiliate program or something like it, where you pay people for referring customers to your service. With PayPal there’s the Mass Pay service where you can pay multiple people fairly easily. With it you accept the processing fees rather than making the receiver pay it.
It works by uploading a file with the email addresses and amounts in it. There’s an API to the service too if you’re thinking of automating the process.
Comment by Dan Kubb — May 30, 2006 @ 2:28 am
Secure Trading costs about £250 to setup, then they take around 3% of each transaction.
I’m not sure, but I think we’ll be paying any processing fees.
Thanks for the heads up. I’m pretty sure that’s what we’re planning on using, but Dave would know for sure.
Comment by Ryan Carson — May 30, 2006 @ 5:24 am
PayPal is cool, but AFAIK people from around the world cannot withdraw money from PayPal unless they have a bank account in The States. You should look into that.
This means that people will only be able to use the money they receive from you to pay others through PayPal.
Comment by Yariv — May 30, 2006 @ 6:18 am
You say that Google only pays to 17 countries and that with PayPal you can pay anywhere. But isn’t PayPal also limited to certain number of, mostly western, countries?
It’s more then 17 but its still limited. Though, it probably is the simplest solution at the moment.
Comment by Nemanja — May 30, 2006 @ 6:24 am
Ryan, there are lots of countries PayPal doesn’t work with (including mine).
Comment by Sanja — May 30, 2006 @ 6:52 am
Yariv - not true. I’m in the UK and use PP for a variety of purposes all the time. And, afaIk, many other people in Europe do the same.
Ryan et al. - Watch out for PayPal’s pathetic approach to VAT. The upshot of it all is that they basically ignore the EU laws, and make it extremely difficult to handle it properly.
Comment by jazzle — May 30, 2006 @ 10:49 am
Here in Bulgaria we can not use PayPal :(
Some people are using PayPal but they have a bank accounts opened in other countries and they NEVER access their PayPal account from within Bulgaria. If they do so, PayPal screens the IP address, and if it comes from Bulgaria it blocks the account. I think the same problem exists in Romania.
Anyway, PayPal is still the best inexpensive choice for online payments!
Comment by Stoicho — May 30, 2006 @ 11:00 am
Yes, however that API does have it’s limitations still - nothing that can’t be worked around.
Actually Ryan, to correct you, it’s 20 countries since May
PayPal is limited to some 55 countries:
* 27 with full transfer in and out
* 7 in, out via check or to US account
* 8 to US account only
* 13 to send money only
.. and here is their faq for non US account
Comment by David Stone — May 30, 2006 @ 11:31 am
I’m interested in whether the payment transactions need to succeed/fail as a group, or whether they are independent - in other words, do you need a two phase commit. So for example, if A pays you (B), then your payment attempt to C fails (say PayPal is down at that stage) … what do you do? How to clean up transactions that fail mid way may need to be considered carefully.
Comment by Glenn — May 30, 2006 @ 1:34 pm
Ryan-
When looking into a way to pay your users via check like google or ADBrite, what were the roadblocks?
Why do you have to be a “trusted software partner” to cut a check?
Comment by mitch — May 30, 2006 @ 4:04 pm
you may want to look into what these guys are doing:
http://fundable.org/
Comment by e.j. — May 30, 2006 @ 8:11 pm
Is there a US equivelant to Secure Trading, or does that service also work for the US?
I hope that the problems works out.
Comment by Hal! — May 30, 2006 @ 10:48 pm
{added}
Do you guys have to get into dealing with tax forms since you are paying people?
Comment by mitch — May 30, 2006 @ 10:56 pm
In the video, Ryan you described that the systems allows person A to pay Amigo which in turn pays person B.
You give the example of Google.
Isn’t eBay a better example (and they use PayPal as well).
Taxes would be somewhat of a pain because you have to show that you are paying money out to person B so that you are not taxed on that money as income, since it’s an operating expense.
Comment by George — May 31, 2006 @ 2:33 pm
We don’t plan on issuing cheques, as it would be too time consuming. Maybe someday, but not now.
Unfortunately, yes. Our accountant is helping us on this one.
Comment by Ryan Carson — May 31, 2006 @ 5:02 pm
Hey guys, ive come up with what i think is a good question, when writing the copy for you app, which type of english does it use? By this i mean, the spelling of words, the english way or the american way?
Comment by James Deer — May 31, 2006 @ 7:28 pm
Oh James - all I can say is can, worms :)
You see I’m English, and as you know Ryan is American, so this question is one that’s very much on our lips.
Rooter or rowter, vitamin or vytamin?
Colour or color, favour or favor? We’ve discussed it all.
In reality when it comes down to web apps American spellings usually prevail. Not because Ryan can shout louder than me (he can) or even because it’s a finer use of the English language (it’s not) but because there are more of them than there are of us - online I mean :)
Invariably because the largest slice of our audience will probably be American then we’ll go for American spellings. Incidently, all our prices will be in dollars as well.
Good question though!
Comment by Gillian Carson — June 1, 2006 @ 2:19 pm
Another point is that Brits will usually accept the US spelling, whereas Americans seem to find it more jarring and will write in complaining about typos :) Supposedly they even accept spellings like ’sulfur’ in GSCE Science exams now..
Comment by Peter Cooper — June 2, 2006 @ 4:56 pm
They’d accept ’sulfa’ too (as it’s not an English exam).
Thanks for your tips Ryan, especially about st.
Cheers,
-F
Comment by FIn — June 2, 2006 @ 10:33 pm
Thanks for the responses, you all make good points.
Comment by James Deer — June 3, 2006 @ 7:21 pm
So that was interesting, but why the need for video? Something I easily could have gained the identical information about via reading the RSS feed and I’m forced to watch a video of a talking head? C’mon…
Comment by Mark Belanger — June 9, 2006 @ 1:40 am
I think the video is a good idea for folks who do not have time to read or prefer to listen.
It is true that the nature of the subject matter makes it more appropriate or not.
Comment by valley — December 19, 2006 @ 6:52 am