I'm afraid this probably runs afoul of the escrow laws. Such laws vary somewhat by state, but they generally cover situations where you act as an intermediary

I'm afraid this probably runs afoul of the escrow laws. Such laws vary somewhat by state, but they generally cover situations where you act as an intermediary in a transaction, holding money for one party until the other party satisfies some condition. The problem with this business model in general is that it provides a great temptation for embezzlers, as the amount of money being held at any one time can be quite large (being the sum of multiple pending transactions). The easy fix is not to actually charge people when they place a bounty, but instead get a preauthorization; then you can charge them at the time the bounty is actually paid. Depending on how PayPal's API works, you might be able to do this without having the money actually pass through your account. This would also give you the option of not charging them at all if their problem wasn't solved, but presumably you don't want to do that since it opens the system to abuse.