How to setup paypal for crowdfunding portal

Question

I want to setup a crowdfunding portal. What I want is for none of the backers money to be taken from their paypal accounts until the project is fully funded,and then when that happens for all the money to flow from the backer to the project owner directly with myself just taking a cut in between. That way there would be only 1 set of fees.

How could I set that up with paypal? I know about adaptive/chained payments, but I need actual examples of how to implement that and any advice on what's the best way to set it up?

Answer 1

There aren't really any Adaptive Payment API calls that allow you to hold money for a certain amount of time and then release it to multiple parties. There is Delayed Chained payments but the primary recipient is always paid first and the secondary payment is what is delayed and can be sent out later.

Pre-approvals and a normal delayed payment allow you to capture money as the primary receiver at a later date but they don't allow for multiple recipients.

Crowd funding options aren't the best through Adaptive Payment API calls because of this. The normal PayPal API calls don't have anything better and the REST API's don't yet support multiple receivers.

You can download the Adaptive Payment SDK here: http://paypal.github.io/

Answer 2

PayPal seem to have added support for this using a combination of Parallel and Preapproved payments: https://developer.paypal.com/docs/classic/lifecycle/crowdfunding/

The application model used in this document implements a crowdfunding platform that lets project owners register and manage individual crowdfunding events. Event customers are those who contribute to the fundraiser. In this application model, the platform owner stands as a business entity that is separate from the project owners who conduct the crowdfunding events.

A crowdfunding application must use preapproved payments with defined terms for the event contributions. Preapprovals provide the ideal funding flow for all-or-nothing crowdfunding models; no money exchanges hands until the fundraising target is reached. By providing defined terms, you minimize fraud risk by providing a controlled environment where the payment receiver, the maximum fundraising duration, and the maximum contribution amount and frequency are determined before the event begins.

Depending on the specifics of your fundraising model, you must use preapproved payments coupled with either parallel payments or chained payments to distribute funds to the different recipients. These models allow for each PayPal account involved in a crowdfunding transaction to receive different shares of the transaction amount.

Both payment flows avoid the issue of aggregation, which occurs when funds are allowed to accumulate in an intermediate account before being passed to the end recipient. PayPal's chained and parallel payment flows provide visibility to all parties in a transaction, and the end recipient (the project owner) must be named in each of these payment methods.

I know this is probably a bit late for you, but in case anyone else comes across it...