I'm building a 2-sided marketplace wherein users can buy + sell advice, and pay for with micro-payments (Fiverr + Clarity = Wisewords.co) here in Canada. I'm pretty sure I need to hold the funds and let people build their balances before withdrawing, as most of their payments will be less than $10. Assuming I do hold funds, how big of an undertaking is it to hold funds for users? Are there many regulatory requirements? Any third-party services that do this in Canada?
I'd agree with Mikeal. I've also integrated with BalancedPayments for my startup BizeeBee. I went through a year long search before I chose them. It took awhile because Stripe and Balanced didn't exist when I was searching.
However, I don't know if Stripe or Balanced supports Canada yet. You might have better luck using BrainTree if you're looking for support in Canada.
Holding funds for users isn't the big issue. The issue is the reason why you need to hold funds, which comes down to two things:
1. Fraud - you want to make sure you've verified someone's identity before letting them withdraw a large sum. Your underwriter might also limit how much you can withdraw at a time e.g. PayPal has limits of $1000 initially.
2. Cost per transfer - most of the time it's not that expensive to do a transfer of funds to a bank account. However, if you find that in aggregate it's costing you a lot, then it makes sense to batch all the funds, and issue a transfer every few days or once a week.
Here is more info on the thought process I went through when picking a payment processor for my startup BizeeBee:
http://bizeebee.com/2012/04/bizeebees-process-picking-payments-processor/
Answered 10 years ago
Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.
Already a member? Sign in