I've recently had a business idea that would allow money to exchange hands between individuals, frequently.<p>After getting in touch with Stripe - they mentioned it would fall under a Money Transmitters / Money Service Business (MSB) - which is one of their prohibited businesses.<p>Is anyone dealing with processing payment as transfers? Anyone used PayPal (or others) as a provider for MSB?
From what I know I am almost positive that PayPal and other standard payment services will not allow you to act as a MSB. I believe you would have to directly interface with a bank or clearing house. A huge portion of the setup and business would revolve around fraud protection and legal structure. Overall from a technical perspective, it is easy to setup ACH clearing, done that a couple of times, and credit card processing is easy enough too. But it is the business agreements with the banks that may be a sticking point.<p>You could research how Stripe or Balanced Payments set themselves up early on to see some of the work they did.<p>Also, you say frequently so I also assume you want to make it fast. Just some things I have learned working with payments over the years which you may know already. ACH transactions are batched overnight in general, so to move money from 1 person to another it takes a minimum of 48 hours generally. From party A to the MSB, then MSB to Party B. Credit Cards aren't generally a good idea with this because of the simple fact of charge backs and consumer disputes they bring up. And wire transfers while basically immediate (1-4 hrs normally) within the US, are costly and that I know of there is not an interface into them unless you are a bank because they go through the Fed. Of course this assumes the person doesn't have money in their "account" at the MSB to cover the transaction, otherwise of course it only takes 1 day in general. And this also assumes you aren't providing them some sort of credit extension to cover transactions.<p>I am sure other people have way more knowledge than I do on this topic, just thought I'd toss out what little I've learned.