Split a payment into two different PayPal accounts

[mcaff]

I've already done a lot of research on this subject, to no avail. My company allows sellers to sell a product on the website, and share some percentage of their revenue with another person who promoted the product. For example, this is the typical flow:

1) Seller lists a product for $10, offering a 20% commission to any promoter

2) Promoter promotes this product to a buyer

3) Buyer buys the product. The seller gets $8, the promoter gets $1.50, and the platform (our company) gets $0.50

Essentially, the seller gets whatever percent they chose, the platform gets a 5% cut, and the promoter gets the remaining amount (5% less than the commission that the seller provides)

I've looked into PayPal's adaptive payments, which looks perfect. However, this has been deprecated. I've also looked into the PayPal marketplace, but am afraid I won't be approved because this is a new startup. One other option is simply making the buyer make three separate purchases, but this incurs a lot of fees and is complicated for the buyer.

So, I came across PayPal Express Checkout Parallel Payments. However, there are a few issues that need to be sorted out first:

What happens in the case of a refund or a chargeback? Do all three parties get their money withdrawn (this would be ideal), or, would the seller be responsible for the total amount of the refund (so even though they only made $8, they would still be responsible to refund $10).

How about chargeback fees? Would those all go to the seller? (that would be ideal).

How about fees on the payments? Does every party incur the 2.9% + 30¢ fee? If this was the case, then the total fees would add up to be 2.9¢ + 90¢ (30¢ three times), which would be bad. Or, does the fee get deducted from the original amount (so the buyer pays $10 and then we have about $9.50 to distribute in the percentages above without any fees)?

As a side note, I've also considered just accepting all of the money into one account and then disbursing the money using payouts. However, this would be a huge issue because now my company is holding other people's money, which is a legal issue, and if we make a payout and THEN someone makes a chargeback, the company would end up losing a bunch of money.

If the answer to this is "Just wait for PayPal marketplace", if you could still answer my questions about fees and chargebacks, but for the marketplace, that would be great!

Thank you!

[WarrenPink]

Hi @mcaff, Thanks for reaching out here in Community Forum. There's a lot of park questions you got right there. I'll try to answer all the questions you have. You may reply if I miss something. 

Base on my understanding, what will happen here is you will be the supplier of the item to let's say Person A, then the Seller which is Person A will have agents who will sell and offer this item. This process will be quite heavy for the seller as Person A will be responsible for sending the commission of the agent and the seller will also responsible for paying you the platform fee which is the company fee. This can be considered if the seller will remit all commission and platform fees at a specific day or time because it will be very inconvenient financially to move money in every successful share. 

1The moment that a refund must be initiated, it will all be shouldered by the seller who has the PayPal account where the original payment was posted. If the amount is not sufficient on the Sellers PayPal balance, the refund will be pulled out on the seller's bank account. we will take it as a negative amount if it will be disputed by the buyer wherein the seller has to pay it using their bank account.

PayPal fees will be applied to the original post of payment. Take note, there's also a fee in sending Payment from a PayPal account. So the seller has the option of withdrawing the money and lets the seller send it to you as a check or deposit it in your bank account.

Chargeback fees will be shouldered by the seller since original payment will be posted onbtheir account.

Feel free to reply on this thread and ill try to respond as fast as i Can. I hope this helps! Stay Safe