Paypal Masspay API for amazon like site

Question

I am developing a website where the users can sell their products. Users can then also buy products on the site, obviously, lol. However the problem is that I am currently using Paypals Parallel Payments and it limits the number of items a user can buy to 6 different sellers at a time including the sites fee.

So I was thinking about switching to using PayPals Masspay API instead. It would work like this. The user buys as many products as they want up to the limit of 250 different users using eithier the Masspay api if acceptable for 1-to-1 payments or something else. Once the payment is completed to the sites paypal account, It will start a masspay api call to pay all the differn't users upto 250 users using the funds from the payment to the site once those are completed.

Also I am limited to paypal right now so I can't use any other payment services.

So is this ok to do or is this a bad way to do it maybe for some security reason I do not know about?

It seems like the only good option, on the plus side, it benefits from the lower fees that masspay offers vs the %2.9 + 0.30 Cents.

Answer 1

First, you'd have to get it approved by PayPal to enable MassPay for your account.

Then, you'd need to be careful about chargebacks and dealing with refunds. If somebody submits an order for $1k, for example, and you dispersed that money among 25 different people, and then the buyer submits a dispute with their credit card company to get that $1k back, you'd be stuck trying to collect all those pieces from all the people you distributed to.