Payments for a 2-sided credit-based marketplace? | Hacker News Reader

Payments for a 2-sided credit-based marketplace?

5 pointsCryoLogic4 comments

Hi,

I have been researching payment processors, and found that it is very difficult to find one that accepts the following type of company:

1. A "producer" signs up and produces content

2. A "consumer" signs up, buys a multiple of in-app "credits" - than these credits purchase "goods" from the producer

3. The producer can than "redeem" these credits for cash, effectively making the application an economy for both consumers and producers.

This seems like one of the most effective ways to build a platform, since cash incentivizes "producers" to join - and a credit system eliminates much risk of chargebacks and allows for "microtransaction" style payments (no flat fee accept on initial credit purchase).

What do you call this type of business? And are there any payment processors that support this type of business?

Payment processors are wary of these types of setups because of the money laundry risks. In addition, fyi - this sounds like "social money"/e-money, which may be a regulated activity depending on setup and where you are.

I am sort of stuck on this too. From my research, you want to avoid being a 'payment aggregator' but the definition of that depends on the payment processor.

SubmitHub has a similar setup and reports using Braintree (Paypal). I wonder if he only uses that for one side of the marketplace though, because holding payments is where I'm stuck. Maybe cutting checks manually to the producer solves everything? I can't find a clear answer.

I guess it could go as a gambling/game type business since mostly those types of businesses uses credits?

Yes, many games do use credits. And Stripe/Braintree/Paypal will all let you build games that use credits on their platform.

However, I don't know of any games that allow you to redeem the credits for cash - which would be incredibly useful for incentivizing production of goods in a digital marketplace.

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