strnisa 2 days ago

Requiring money upfront would classify the platform as an e-money institution, which is highly problematic from the legal perspective.

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  • jazzyjackson 2 days ago

    How does tarsnap handle it? I think there's lots of services that bill up front... Isn't it only e-money if you can convert it back to cash?

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    • strnisa 2 days ago

      If you store funds for a specific service that you provide, it's fine. If it's for many services or services provided by others, it's legally problematic.

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      • strbean 8 hours ago

        What if you inverted the trust equation by giving the money to the service provider immediately, rather than holding any of the up front payment?

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        • strnisa 7 hours ago

          We don't hold upfront funds. When a customer pays, we initiate Stripe transfers to the merchant as soon as the funds are available.

          Paying the merchant before the customer's card payment settles would mean advancing funds, which would start to resemble lending/guarantee rather than payments, raising regulatory issues. It would also concentrate risk at the platform: defaults from one merchant’s customers could jeopardize the platform for all merchants.

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  • namibj 19 hours ago

    > Requiring money upfront would classify the platform as an e-money institution, which is highly problematic from the legal perspective.

    What if you just reserve it on the card?

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    • strnisa 19 hours ago

      Online card holds typically expire in ~7 days (often sooner, depending on the issuer), which is too short for our use case.

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