The business model that you explained is a true peer to peer payment system. As you know, it's essentially what Paypal is to ebay. It's presents perhaps the highest form of risk in the payments industry. This is especially true with new businesses because there is no track record and typically very little financial stability or backing. There is a graveyard in the payments industry dedicated to peer-to-peer payment startups, including some extremely well funded and connected companies, which is why it's so hard to find any payment provider willing to accept the risk. A lot of money has chased this for a long time now. Last time I checked, even Paypal won't allow provide payment services to other peer-to-peer providers, because, as they've stated, the "excessive risk". To date we've (Braintree) not approved any true peer to peer payment method as you described above, but we do process for a lot of merchants that use an aggregation model similar to Groupon, whereby the merchant accepts payment on behalf of another merchant. It's a small but significant difference.

In terms of revenue. It's always helpful if a business already has a track record and some external funding for validation as well as some stability. That also clearly presents a catch-22. Some providers are wiling to take substantial risks: new business, peer-to-peer track record and no funding while others are only willing to consider this type of high risk businesses who have an established track record.

I would offer a friendly word of caution. All too often new companies will find a provider to approve this type of business model only to be shut down at the worst possible time. This happens because sometimes the sales rep doesn't properly explain the business model to the underwriters, the underwriters don't understand it, and/or an application gets auto approval because it's new and has low expected volumes. I'm not suggesting that there are not providers that won't approve this type of business, and I'm also not suggesting that everyone approved for this type of payments model will eventually get shut down. What I am suggesting is that we see merchants getting shut down too frequently, so I'd be cautious if I were you.

Best of luck to you.

Aggregation more fully explained: http://www.braintreepaymentsolutions.com/blog/high-risk-mech... More information about payments and risk: http://www.braintreepaymentsolutions.com/services/new-to-pay...