Comment by jazzyjackson
Comment by 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?
Comment by 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?
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.
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.