Hi -- I'm trying to set up Chained Payments to take a transaction fee. I know it works from a functionality standpoint. I'm getting a great deal of push back from PayPal about this method where the Seller is the Primary Receiver & I am the secondary receiver. They are saying to do Express Checkout for each seller and then charge a fee per transaction to that Seller.
Here's the response I got:
"If you are the primary receiver, your PayPal account will be fully responsible for any payments going through your platform. that means if you only take 10% out of $100.00, you seller gets the 90 dollars after shipping the goods and walks away. A couple months later, the buyer decided he will have some questions about the product he is using. He called his credit card company. $100.00 will be out of your account. If you cannot provide the information that credit card company would like to see. or they tell you, go to buyer's porch to pick up your item as the item doesn't function the way the buyer had expected and buyer won't have time to ship the item back... you will be out of $100.00 and on top of that, PayPal will charge you a chargeback fee for handling this exception process. If you don't even vet your merchant, then the issue will be even worse. as ultimately, PayPal will have to pay back whatever credit card company asks for. Buyer has average 6 month to 1 year to question any transaction on their credit card statement. They can choose to pay the bill or decided to ask more questions. For them it's asking questions, for PayPal and you, it's chargback as any payment in question will be pull back right away to the credit card company.
Having preapproval payment billing agreement set up with seller, as you are the app caller so you know exact when the seller receives the payment. once the seller receives the payment, you have it set up to charge the fee right away based on the billing agreement. so the seller is the merchant of record and you taking the fee from the backend.
That's the only model we can suggest but you will need to monitor your site as if your site start showing large amount of chargebacks and counterfeit items or no receipt cases, PayPal will have to take action."
Is there liability in this model that she is suggesting?