View Full Version : C2C fee based payment architecture

08-08-2003, 06:43 PM
Hi All,

We've all seen the broker model websites such as ebay, paypal, orbitz, priceline, escrow, etc... and I'm interested in knowing exactly how the payment module works.

I understand the basic premise (which isn't much different from regular e-commerce systems), yet I'm sure there's something in the equation I'm not familiar with and I'm hoping those that are would point me in the right direction.

My understanding of the system is a user comes to buy (buyer) and finds the item they are interested in. The seller (seller) then sells them the unit for the agreed upon amount (e.g. $30). The buyer provides the contact information to the broker (the website) and the broker validates the transaction for the amount agreed upon between the buyer and the seller (e.g. $30.50). The broker holds the amount in an 'escrow like' account until the buyer informs the broker they have received their goods. At which time the broker releases the payment to the seller (minus the transaction fees) (e.g. fee = 5%, total payment delivered ($28.50).

Now, the standard transaction of monetary exchange between the buyer and the broker occurs just like any e-commerce site and the money is placed into the brokers account. When the broker is notified the buyer has received the goods and all is well, then the broker EFT's the money into the sellers checking and/or credit account? Or does the broker transfer the money to the seller via the same method they received the money from the broker?

I guess the question is, what manner could this system work best and require the less amount of fees (by the broker to third-parties such as gateways, banks, etc)?