Item — HN Reader

I had 100% same idea since a few months now. Didn't pursue it because of lack of companies and customers willing to use such a platform as intermediatory.

Secondly, the legal aspect. Will this be considered as a wallet?

Anyways, loved to see it implemented by someone.

1 comments

You're right to consider this, as it's an important aspect from a legal perspective.

Since Small Transfers doesn't store customers' funds or allow them to withdraw a balance, the platform is not considered an e-money institution or a "wallet".

When the customers pay their balance, we immediately forward the funds to the merchants.

What happens when customers don't pay their balance?

What happens when the charge attempt fails after initial preauth?

Ultimately, the merchant bears the risk of non-payment, but the platform does its best, using industry-standard practices, to pre-check the customer and their payment methods for fraud and ensure a successful payment.

If a merchant successfully authorizes a charge, the amount is reserved for that merchant for a limited period. Trying to capture that amount (or less) during this period will succeed.

I'm a little confused. Is Small Transfers not the merchant for the CC transaction? (Your website suggests Small Transfers is the merchant of record and then transfers funds to the seller.) If not, what's your role in the settlement process?

Yes, Small Transfers is the merchant of record for the card charge. We transfer only funds actually received to the merchant's Stripe account; we don't advance funds. As per the Terms (§1 "Transfer" and §5.6 "Non-Payment"), chargebacks/reversals are net-deducted from future transfers, so the seller bears non-payment risk.

Details: https://smalltransfers.com/terms