Using Paypal MassPay in an eCommerce application (revenue shares, commissions)

Question

I understand that Paypal's MassPay can be used to, as a business, quickly make payments to multiple people. I also understand that the business sending the mass payment is responsible for the transaction fees, and that the recipients of the payments are not charged any further fees.

I am curious if it's possible to utilize MassPay to account for revenue shares / commissions when a buyer purchases a product through an eCommerce application.

For instance: my application allows users to buy and sell products. My business keeps 20% of every sale, and the seller receives the remaining 80%.

A seller sells a product for $100 to a buyer through my application. My business should receive $20, and the seller should receive $80. The buyer completes the checkout / purchase process by making a $100 payment through Paypal. My application has MassPay configured in a way that will send $20 of that $100 to my business's Paypal account, and the other $80 of that 100$ to the seller's Paypal account.

1. Is such a thing even possible?

if the answer is yes…

2. How will this appear in the Paypal accounts (activity / transaction history) of the buyer, the seller, and my business?
3. What if the buyer has a problem with the product they purchased, and they open a dispute with Paypal? Will they have to open a dispute for one transaction ($100), or two ($80 and $20)?
4. Because the buyer is the person making this mass payment, will they be charged additional fees in some way? Will those fees need to be factored into their purchase cost during the checkout process?

Thanks in advance.

Answer 1

You can absolutely use masspay to send "contingent" payments like rev shares and commissions; in fact this is the product's most common usage. It was built for that.

You may also be able to use PayPal products like chained or parallel payments to create multi-link payment flows.

In most cases you want payments to flow along with responsibilities/agreements. For example if I buy something (e.g. a t-shirt) I don't want to make multiple payments to supply chain members; I want to buy the shirt from someone and pay them, and it is their responsibility to take it from there; they may then owe a commission to someone (or to 10 different parties, I don't care), or they may owe a supplier (or a bunch of them)... not my problem.

So I strongly urge you to decide what model you want: is someone buying a product from you, and you will pay a supplier? is someone buying a product from a seller, and the seller will owe you a commission for providing the customer through your marketplace? Then set up your payment flows accordingly.

In the former case (ecommerce store) masspay is an excellent fit: the customer pays you and then you masspay (on a per-transaction or aggregated basis) payments to your suppliers. The buyer only sees the payment they are party to, which is their payment to you. Any dispute is between you and your buyer.

In the latter case (marketplace) the customer pays the full (total including commission) price to your sellers. Then you don't need to push a payment to your sellers but rather to collect a payment from them, so you would likely use invoicing or a billing agreement to collect your commissions.