Billing / Transaction Handling

[teynon]

Ok, so I am kind of just looking for some experience on this one. I am building a billing / referral system that works on a hierarchy. Now the hierarchy is simple and straight forward. However, I am trying to figure out the easiest / least error prone way of handling the payments.

 

I have an IPN with paypal set up and working successfully. Here is how the system works:

 

User signs up and refers several users. Each user pays $8 a month (paypal subscription). The system pays $1 7 levels deep. So The payment scheme would look like this:

User 8 pays $1 to User 7, 6, 5, 4, 3, 2, and user 1. Then, the site keeps the remaining $1.

 

I have the Paypal IPN saving the $8 payment transaction to the database. Now I need to divy it up, but I am split on when the best time to do this would be and how. There is a possibility that the user could pay a different amount less than or more than the $8 and they also pay a setup fee which should not be divided. It should only divide the shares when the current account is paid in full.

 

Another thing to keep in mind, is that the $8 subscription, 7 levels deep, and the setup fee are variable numbers. (The admin may change it at any time.)

 

I see multiple solutions, but not sure which would be best as all have possibility for errors in handling.

 

Any advice would be helpful.

 

Thanks,

Tom

[codefossa]

This makes no sense.  It looks like you're tryin' to make a pyramid scheme, but backwards which means you would only profit if you didn't start in the beginning, which still is not legal because you will crumble under your own weight.

[teynon]

I'm building it for a customer. It is a pyramid scheme, but its for a service. Basically the customer wants to have special offers available for $x a month. Then if you refer someone, you make $1 off of them every time they pay. It would still make money because the payout stops before it goes to far. I can program stops for it as well. But I'm trying to figure out how and when to handle the redistribution of wealth. It's not as much a pyramid scheme as it is a referral system with multiple levels.

 

However, if this is illegal for some reason, please let me know why, as this project has been getting on my nerves lately anyways.

 

Tom

[jcbones]

http://www.consumerfraudreporting.org/MLMscams.htm

http://en.wikipedia.org/wiki/Pyramid_scheme

 

I think in order for it to be legal, you can only pay a referral fee to the person referring. If the person is receiving a legit 'subscription', to a real product, you could go back several layers deep. In other words, paying $8 a month for a subscription to news.google.com is NOT going to make it legal.