How to avoid factoring?

[sk24iam]

I plan on using a merchant account/payment gateway to allow users to auction and sell goods to one another similar to ebay. Would it be considered factoring if peer buyers paid with credit card and peer sellers received money through bank deposit? How do I go about avoiding factoring?

 

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[BurnBright]

One way is to charge a flat fee for the listing and allow the users to transfer fund with their paypal accounts.

Another way is to have a system that releases fund only when you are confirmed that delivery has taken place. This is difficult when you are not in possession of the goods yourself. Maybe a third party can provide this service.

It is funny but a business I was researching merchant accounts for today was accused of appearing as a factor also. I think I have a solution but it is different from what yours will be and have yet to confirm if it will pass the no factor requirements.

 

[sk24iam]

Well it looks like this will be another obstacle to getting my business going. I'll have to research how sites like ebay or half.com get past it.