In Europe you would need to set yourself up as a payment services provider (PSP). I believe the US has a similar regime. https://paymentscompliance.com/us-money-transmitters
You'll need a reasonable amount of capital behind you. Next step would be to find a law firm specialising in payments and go and get some advice.
Ask HN: How to create a service similar to Patreon?
11–20 of 97 posts
Re: Ask HN: How to create a service similar to Patreon?
#12This is a really hard problem. You do not want to have to register as a bank or hire an expensive compliance team. Use Stripe.
It's not a "hard problem" in the typical sense of the term. Money is not fundamentally hard -- the current state of financial law is what makes this hard. It's just a regulatory nightmare which makes this problem infeasible for random, unconnected people to try and solve.
Re: Ask HN: How to create a service similar to Patreon?
#13My advice would be to join Patreon/Stripe/some other payment services company, and realize that it isn't something a single engineer, no matter how skilled, can throw together in a week, a month, a year, or a decade.
Re: Ask HN: How to create a service similar to Patreon?
#14Here's a post about a story that made the rounds back when Patreon made some changes a while back: https://geoffkratz.wordpress.com/2017/12/10/is-patreon-about... It should give you a few pointers on things not to do in order to steer clear of violating financial regulations. It's probably far from a complete list, but should give you some starting points of things you'll need to be aware of.
Re: Ask HN: How to create a service similar to Patreon?
#15Don't want to discourage you but money health and law are the three worst thing to work with in IT
First of all you can't neither "term-of-service-away" nor delegate diligence, second because the regulatory frameworks around them updates almost yearly if not more often.
Self research these three topics doesn't seem a good idea. Budget for or partner up with an expert in the field, because even using a third party service doesn't fully absolve you from responsibilities.
Re: Ask HN: How to create a service similar to Patreon?
#16There is absolutely no shortcut in this things. As soon as you are paying users there will be all sort of legal requirements/side effects which you need to be aware of. Starting with money laundering, taxes (yours and from your users even!), pleasing your payout provider that your content is not illegal, beeing able to payout in US&Europe or even global and ending with costs (you will probably never be able to compet…
One question (since I do like shortcuts) -- what about if you have uses pay each other (through whatever means is available to them), and only act as the sort of negotiation point? Here's what I'm thinking: - user signs up - user registers x supported payment accounts (Paypal, Venmo, etc) - when a user wants to pay another user on their site, you send them to the appropriate payment provider with the details of the o…
Won't work for sure.
Alternative: The only shortcut (which is also interesting from a technical standpoint) I know of is going with this things 100% into crypto (but not develop your own crypto currency, use established ones like BTC, XRP, LTC, ETH). I'm not a big crypto fanboy but this is an area where it shines, of course it will make your audience smaller!
Re: Ask HN: How to create a service similar to Patreon?
#17Earlier quoted context omitted.
One question (since I do like shortcuts) -- what about if you have uses pay each other (through whatever means is available to them), and only act as the sort of negotiation point? Here's what I'm thinking: - user signs up - user registers x supported payment accounts (Paypal, Venmo, etc) - when a user wants to pay another user on their site, you send them to the appropriate payment provider with the details of the o…
How would you get paid in that scenario?
A subscription might work, or trying to get payment from the creators to be on the system.
It's a bit of a chicken and egg problem of course -- as the service needs to be popular to justify a creator paying anything, but that's the same regardless, and if the price is right then you can at least get people in the door. for example $12 (so $1/month) for a high quality patreon funnel that you don't maintain and also (theoretically) helps people discovery you doesn't seem like an impossible sell.
Re: Ask HN: How to create a service similar to Patreon?
#18Earlier quoted context omitted.
One question (since I do like shortcuts) -- what about if you have uses pay each other (through whatever means is available to them), and only act as the sort of negotiation point? Here's what I'm thinking: - user signs up - user registers x supported payment accounts (Paypal, Venmo, etc) - when a user wants to pay another user on their site, you send them to the appropriate payment provider with the details of the o…
Won't work for sure. Alternative: The only shortcut (which is also interesting from a technical standpoint) I know of is going with this things 100% into crypto (but not develop your own crypto currency, use established ones like BTC, XRP, LTC, ETH). I'm not a big crypto fanboy but this is an area where it shines, of course it will make your audience smaller!
Could you discuss why?
Re: Ask HN: How to create a service similar to Patreon?
#19There was an alternative named Hatron that used Visa until Visa pulled services because they funded conservatives. Libertarians, and white nationals. So contact the credit card companies and watch who you fund.
it was probably the white nationalists that caused visa to pull out
Re: Ask HN: How to create a service similar to Patreon?
#20Hire someone that knows the answer, ideally someone that's worked on exactly this type of system before. Don't make any decisions about something this delicate based on the advice of random people on the internet.