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I had an idea for a competitor in the Patreon space a couple of years ago, but with a twist that I feel would have made "patrons" much more comfortable with the

I had an idea for a competitor in the Patreon space a couple of years ago, but with a twist that I feel would have made "patrons" much more comfortable with the whole thing. I even registered a domain, started on some coding, and consulted with some designers. But it quickly became apparent that financial gateways (credit cards, Paypal, etc) are hostile to the idea of allowing me to charge customer A, keep a cut, and pay customer B. Terms of service usually forbid this sort of action. How does one circumvent this hostility? Obviously it's possible, since Patreon and Drip exist, but I didn't know where to start. I still think my idea is worth a try, but I'm stuck.

BlackjackCF 9y ago
Is this the case if you use Stripe and Plaid for handling credit card/ACH?
aaronbrethorst 9y ago
Stripe has a feature explicitly designed to support this scenario. https://stripe.com/connect https://stripe.com/connect
- DamnInteresting 9y ago
  Nice! That looks like just what I need. Either it didn't exist when I last researched the issue, or I somehow missed it. Thanks!
  - travisjungroth 9y ago
    It’s not that old; probably didn’t exist.
  - SkyPuncher 9y ago
    I believe it just came out this year. We're in the process of integrating connect and when we started, it is was not a full-blown product yet.
SeanOC 9y ago
Stripe connect (https://stripe.com/connect https://stripe.com/connect) is probably the easiest option available today. Otherwise, it's a pretty complicated negotiation and certification process as in addition to the processor twitchiness there are a bunch of state wire transmission/money laundering laws that you are getting rather adjacent to that can be a mess to navigate.
EGreg 9y ago
Aren't you describing essentially a MARKETPLACE which takes a cut? That may make you a "money transmitter". I did a lot of reserch on whether every marketplace (Uber, TaskRabbit etc.) needs to get a money transmitter license. It seems this is a grey area, and the answer is probably: no, you don't have to register, because you aren't just sending money but paying people for services. Where it gets tricky is when services are "broadcast" to many people. Then you get into Online Courses territory. People can purchase subscriptions to your courses etc. The short answer is, you can circumvent gateways by using permissionless currency networks like bitcoin and litecoin. But what I want to know from the HN crowd is, what kind of hostility can Stripe have when they power marketplaces all the time??
no1youknowz 9y ago
I was going to write the exact same response. One day I'm going to write a blog post because the overwhelming response has been very hostile. Even when companies advertise that they do it. Here's my experience so far: Adyen. Overwhelmingly hostile to startups. All telephone numbers get routed to support. So if you call sales, someone in support answers. The individual who answers the phone also has very basic knowledge of their product line. Each office that I contacted (US, Europe/London and Europe/Amsterdam. All gave differing reasons why I was not suited. Where it last ended, because I wasn't doing $1m a month. I was not a suitable candidate for their services. Even though someone in the London office did mention I could email my business plan in, although there was no chain of custody and who knows who would be looking at it or when they would come back to me. I think they were really saying that to make me feel better. So really. How can I get to $1m/month, if I cannot start? Braintree. Had good response with braintree, was about to pull the trigger. But then their marketplace solution has been superseded by paypal's new offering of marketplaces. Paypal. Called their business team and been forwarded to partnerships. Can't get a hold of their partnership team as they don't have an email or telephone number. 14 days has passed by and all I'm looking for is a simple yes or no. I have filled in their contact form (3 weeks ago) here: https://www.paypal.com/us/webapps/mpp/partner-program/contact-us?ref=marketplace https://www.paypal.com/us/webapps/mpp/partner-program/contac... But never hear anything back. Stripe. Even though this was my initial provider to go with. It's currently a non-starter and I am leery to approach them. With no actual phone number to contact them on and previous email exchanges being less than steller and not having someone who actually could understand the business model. Note: Shopify is doing the same for heavens sake (yes I am frustrated lol). Additionally, I am not in the US, so there is also the extra hurdle of having to go through stripe atlas. But again, not really wanting to forward my business plan into the void. If Stripe had a phone number that I can call, I would investigate that possibility. Can't really understand when I can call lots of other finance companies. I can't get hold of Stripe directly. Worldpay. Didn't understand my business model. Even though they promote themselves as being able to deliver complex solutions. It was determined that they could not support my marketplace. ------ Finally, if anyone is reading this and is from an acquirer in the US or perhaps from the companies mentioned above. Or perhaps a partner of stripe-atlas so I don't have to wait two weeks/direct contact. Please let me know. My forecast is that there will be a tipping point in the first year where I will be doing $5m a month. The sad part here. The development of the platform/marketplace. This was the easy part. The difficult part, is finding someone high-up enough the ladder to see that they will be on-boarding a company who their closest competitor is now doing $100m a year. Where that competitor is tiny in the overall competitive space.

BlackjackCF 9y ago

Is this the case if you use Stripe and Plaid for handling credit card/ACH?

aaronbrethorst 9y ago

Stripe has a feature explicitly designed to support this scenario. https://stripe.com/connect https://stripe.com/connect

DamnInteresting 9y ago
Nice! That looks like just what I need. Either it didn't exist when I last researched the issue, or I somehow missed it. Thanks!
- travisjungroth 9y ago
  It’s not that old; probably didn’t exist.
- SkyPuncher 9y ago
  I believe it just came out this year. We're in the process of integrating connect and when we started, it is was not a full-blown product yet.

SeanOC 9y ago

Stripe connect (https://stripe.com/connect https://stripe.com/connect) is probably the easiest option available today. Otherwise, it's a pretty complicated negotiation and certification process as in addition to the processor twitchiness there are a bunch of state wire transmission/money laundering laws that you are getting rather adjacent to that can be a mess to navigate.

EGreg 9y ago

Aren't you describing essentially a MARKETPLACE which takes a cut? That may make you a "money transmitter". I did a lot of reserch on whether every marketplace (Uber, TaskRabbit etc.) needs to get a money transmitter license. It seems this is a grey area, and the answer is probably: no, you don't have to register, because you aren't just sending money but paying people for services. Where it gets tricky is when services are "broadcast" to many people. Then you get into Online Courses territory. People can purchase subscriptions to your courses etc. The short answer is, you can circumvent gateways by using permissionless currency networks like bitcoin and litecoin. But what I want to know from the HN crowd is, what kind of hostility can Stripe have when they power marketplaces all the time??

no1youknowz 9y ago

I was going to write the exact same response. One day I'm going to write a blog post because the overwhelming response has been very hostile. Even when companies advertise that they do it. Here's my experience so far: Adyen. Overwhelmingly hostile to startups. All telephone numbers get routed to support. So if you call sales, someone in support answers. The individual who answers the phone also has very basic knowledge of their product line. Each office that I contacted (US, Europe/London and Europe/Amsterdam. All gave differing reasons why I was not suited. Where it last ended, because I wasn't doing $1m a month. I was not a suitable candidate for their services. Even though someone in the London office did mention I could email my business plan in, although there was no chain of custody and who knows who would be looking at it or when they would come back to me. I think they were really saying that to make me feel better. So really. How can I get to $1m/month, if I cannot start? Braintree. Had good response with braintree, was about to pull the trigger. But then their marketplace solution has been superseded by paypal's new offering of marketplaces. Paypal. Called their business team and been forwarded to partnerships. Can't get a hold of their partnership team as they don't have an email or telephone number. 14 days has passed by and all I'm looking for is a simple yes or no. I have filled in their contact form (3 weeks ago) here: https://www.paypal.com/us/webapps/mpp/partner-program/contact-us?ref=marketplace https://www.paypal.com/us/webapps/mpp/partner-program/contac... But never hear anything back. Stripe. Even though this was my initial provider to go with. It's currently a non-starter and I am leery to approach them. With no actual phone number to contact them on and previous email exchanges being less than steller and not having someone who actually could understand the business model. Note: Shopify is doing the same for heavens sake (yes I am frustrated lol). Additionally, I am not in the US, so there is also the extra hurdle of having to go through stripe atlas. But again, not really wanting to forward my business plan into the void. If Stripe had a phone number that I can call, I would investigate that possibility. Can't really understand when I can call lots of other finance companies. I can't get hold of Stripe directly. Worldpay. Didn't understand my business model. Even though they promote themselves as being able to deliver complex solutions. It was determined that they could not support my marketplace. ------ Finally, if anyone is reading this and is from an acquirer in the US or perhaps from the companies mentioned above. Or perhaps a partner of stripe-atlas so I don't have to wait two weeks/direct contact. Please let me know. My forecast is that there will be a tipping point in the first year where I will be doing $5m a month. The sad part here. The development of the platform/marketplace. This was the easy part. The difficult part, is finding someone high-up enough the ladder to see that they will be on-boarding a company who their closest competitor is now doing $100m a year. Where that competitor is tiny in the overall competitive space.