How to implement revenue sharing with users | Hacker News Reader

How to implement revenue sharing with users

3 pointslarkia4 comments

Hi,

I've been lurking this site for a while, and find the content great. I'm working on a startup idea of my own. I've previously worked at large companies developing their websites, so I've got a pretty good idea of how to build the technical parts of it, but my concept kinda requires that i pay the users money.

I've previously worked with billing systems, and to tell you the truth, I'm scared beyond belief from working with these systems.

What I'd like to have, is an account system, where the users earn up money, and then once in a while, can request to get the money out.

How would i go about implementing that?

I'm curious about the following aspects a) are there any technical solutions that i can take and use already (low end (perhaps paypal?) to high end) b) Legal implications (will i be considered a bank, for instance.. I have no knowledge of what i need to be aware of) c) Fraud etc; i guess it won't be that big an issue if the users can only get money they've already earned up, but still.. fraud always comes up when talking about money. d) Anybody has existing experiences with this area?

Most of all, i'd just like to get a good overview of how to go about it, and what to expect, for this part of the project.

Oh, and, i won't say what the project is, because -- as everybody elses -- it's brilliant and never seen before... Well, perhaps not, but the above question should be taken stand alone.

Crosses fingers for good replies. Thanks.

Charging compound interest on debt could lead to loansharking. Allowing payment between accounts could lead to money laundering. For these reasons, such activities generally require financial regulation.

However, you probably don't want to do such activities. You probably want to allow customers to earn commission and get a lump payment when they reach a threshold or an amount of time elapses or they request a pay-out. This would be quite acceptable for a business. The reason for this is quite simple.

It is legal for individuals to owe money and to be owed money. Likewise, it is legal for businesses to owe money and to be owed money. However, a business may have to declare money owed in annual accounts. Additionally, it may be neccesary to hold the full amount in a separate bank account. Even if it is not strictly neccesary, this would be a concise way of showing that your company is trading solvently. Consult an accountant for regional details.

You may wish to make payment by cheque. It is fairly simple to write a program which prints two or three fully written cheques on a sheet of paper. You can minimise mis-addressed cheques by using envelopes with windows and placing the recipient address on the cheque in the appropriate place. Regardless, cheques will go missing. Be gracious. Trust your customer. Fix the problem quickly.

Make an arrangement with your bank to accept your sequentially generated cheque numbers. After the first 1000 cheques or so, you may also wish to make an arrangement to omit your signature from the cheque.

You may want to make an administrative fee for premature withdrawals. Make it small and absorb that admin cost for payments above your preferred threshold. If this fee is excessive then you may run afoul of unfair contract law.

It sounds to me as though you might want to check out Amazon's Flexible Payment System (FPS).

http://www.amazon.com/b/ref=sc_fe_c_1_3435361_1/102-8843924-...

It allows, as the name implies, for very flexible payment transactions between you and the users, or even between two third-parties where you take a chunk out of the middle.

What you're talking about has been done by (at the very least) Jellyfish.com. They give you cash back by shopping through their portal. How do they do it?

Not all people are motivated by money...esp. if it's small chunks of money.

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