PayPal API for Group Buying Business Model

mz001
Contributor
Contributor

Hi,

I need help for choosing a cost effective API that can be implemented into my group buying website. The group buying website works quite similar as other groupon business models in the market.

Therefore, due to the nature of this business model, the "refund" activities is very frequent and high in volume because:
- It collects money from all buyers before the deal is confirmed
- It refund/ cancel payment from buyers if the deal cannot meet the pre-set goal

I was looking at Paypal Preapproved Payment but it seems not so buyer friendly as it requires a Paypal account. Later, i found another two methods below that seems workable for me, i.e.

(A) Capture Payments Later Method (https://developer.paypal.com/docs/integration/direct/capture-payment/)
(B) $0 Auths Method (https://developer.paypal.com/webapps/developer/docs/classic/paypal-payments-pro/integration-guide/WP...)

Unfortunately, i learned that there will be additional charges for the respective method but i am not sure if this is correct.


(A) Capture Payments Later Method
This method allows buyers to pay with direct payment but it seems like i will be charged for $0.30 per each Uncaptured Authorization.

(1) I would like to know if my assumption below is correct,

API triggered authorization when buyer place order during the ordering period (successful authorization)
I will be charged for all the orders received (successful authorization) if the group buying campaign is not dealed successfully

e.g. if i received 100x orders for a group buying deal that requires 150x orders (the deal is failed), and i will be charged for 100 x $0.30 due to uncaptured authorization


(2) What if I am not suing a Paypal Payment Pro?

The merchant fee is stated at https://www.paypal.com/us/webapps/mpp/merchant-fees

Uncaptured Authorization: after a successful authorization, you'll be charged if you do not complete the sale using PayPal Payments Pro: $0.30 per uncaptured authorization


Reference:
https://developer.paypal.com/docs/integration/direct/capture-payment/
https://developer.paypal.com/docs/classic/paypal-payments-pro/integration-guide/WPDPGettingStarted/#...
https://developer.paypal.com/docs/classic/paypal-payments-standard/integration-guide/authcapture/#id...


(B) $0 Auths Method
This method allows buyer to pay with direct payment as well, but it seems like i will be charge for each Card Verification Transaction at $0.30 (on top of $30 monthly fee for Website Payments Pro Account).

(1) I will be charged regardless a successful campaign or failed campaign
I assume this can be very costly as well because i need to verify all the purchase received, regardless be it a successful or unsuccessful group buying deal.

e.g. If i received 100x orders (regardless the campaign is successful or failed at the end), i will need to pay 100x $0.30 for the 100x card verification

The merchant fee stated at https://www.paypal.com/us/webapps/mpp/merchant-fees
Card Verification Transactions: used to verify that a cardholder’s account is in good standing without processing a purchase transaction: $0.30 per submission


Reference:
https://developer.paypal.com/webapps/developer/docs/classic/paypal-payments-pro/integration-guide/WP...


Thank you and please suggest me which is the suitable Paypal API for my group buying business model, thank you
I would prefer a method that allows direct payment

 

Additionally, please kindly advise me if there is any other solution (e.g. signup for Paypal Payment Pro or Paypal Website Pro) so that i can process Preapproved Payment without require my buyer to pay with Paypal account. Thank you

 

If so, do i need to be a registered company to apply Paypal Payment Pro or Payapal Website Pro?

Thank you very much

 

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2 REPLIES 2

mz001
Contributor
Contributor

Appreciate if anyone could help! Thank you

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angelleye
Advisor
Advisor

Yes, you will need PayPal Pro if you want to process credit cards directly.

 

What you've outlined isn't 2 seprate options, though.  It's 2 steps for the same option.

 

The $0 authorization would occur when they signup, and then if you end up needing to process the payments you would capture all of those authorizations accordingly.  

 

Yes, if you end up not capturing you will still have to pay the .30 transaction fee on the authorization transactions.

Angell EYE - www.angelleye.com
PayPal Partner and Certified Developer - Kudos are Greatly Appreciated!
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