I'm looking for a way to let users on my website pay other users on my website for goods or services and for me to take a percentage of the transaction as well as store the transaction data in database.

Is there currently a service out there that will let me do this? Is Paypal capable of this? I know I can receive payments from users and send payments to users, but I want a way to directly let users pay others directly or even pay me directly and then me automatically pay the user who should be receiving the money once the payment clears.

This will be a US only website for now and I'm using PHP and MySql if that makes a difference.

  • I think this is more of a business question than a coding question - I suggest you look into merchant accounts. You'd be the middle-merchant in this situation, processing payments and then paying other people out. Totally possible in PHP/etc, but there's business tasks you need to take care of/learn about first.
    – melee
    Jul 11, 2011 at 16:54

3 Answers 3


If you're in the US you can rule out using a true merchant account for this. Accepting payments on the behalf of another business is called factoring*. Factoring is against the rules set forth by Visa and MasterCard (and I'm pretty sure Discover Card and American Express as well). If you are caught factoring your merchant account will be closed, any outstanding funds will be held for six months or more, and you will be put on the Match File which is a blacklist for merchant accounts. Once you are on it you can never get a true merchant account again.

PayPal offers Adaptive Payments which allows a payment to be split among two or more users. The only drawback is if a user is in a country not supported by PayPal then this won't work for them. Since this will be a US only website that won't be an issue for you.

If you choose to use PayPal's Adaptive Payments, you will need to do some coding on your end to manage how the payments are dispersed. But that would be true of any payment provider you choose for this task. I suspect they have sample code to get you started at their developer website.

* I am the author of this content

  • Hey John, very well thought out and concise answer. One question though. If I were to collect funds from one user and then pay another user from lets say my Pay Pal account, would that be considered Factoring? Technically I would be the only one using the merchant account to collect and disperse payments so it doesn't seem to me like I would be, but maybe I'm wrong. Thanks again for your response! Jul 11, 2011 at 22:41
  • That would be fine.
    – John Conde
    Jul 12, 2011 at 11:57

i did that before on a client website.

the idea is to create a virtual currency on your website.lets say that virtual currency will be credits.

users then can buy credits from you using PayPal and then use these credits to pay other users.

if a user want to exchange credits for real money. he can submit a ticket to you or fill a form that verifies his data and then convert the credit amount to real money and send him the payment through PayPal.

example: $1 = 1000 credits

-a developer sells a theme for 50k credit which equal to $50.
-the buying user pays you for the 50k credits + your percentage.
-the buying user use the credits to buy the theme.
-the developer sells you the credits for the money.

  • I have considered this idea, however in order for a user to get paid, There would still have to be an admin that went in and transferred the funds. I'm looking to transfer funds automatically. Good idea though.
    – bigmike7801
    Jul 11, 2011 at 17:15
  • easy man,when the user submit the form to request money, php script check his data and send the money using paypal api. this means you dont have to check it manually. it can be done automatically. i did it before on a client forum.
    – alhoseany
    Jul 11, 2011 at 18:18
  • Which Paypal api does that? I'm currently using the Paypal IPN ad don't see that option. Thanks! Jul 11, 2011 at 23:10
  • MassPay API.
    – alhoseany
    Jul 12, 2011 at 19:28

If you use Paypal you can set the seller's e-mail address to the user you want to receive the money (he needs to have a Paypal account).

The other way is to act as a middle-man and send them a check or a Paypal transaction on-demand.

  • Can you elaborate on the part where you say "send them a check or a Paypal transaction on-demand"?
    – bigmike7801
    Jul 11, 2011 at 17:16
  • @bigmike7801 cms.paypal.com/ca/cgi-bin/…
    – Manhim
    Jul 11, 2011 at 17:20

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