[consulting] How to send/receive money

[Evan Leibovitch]

sime wrote:
> If you want to use one merchant account for multiple recipients, some 
> banks may look at you funny. I'm aware that there is a type of fraud 
> associated with receiving payments on behalf of others - it's called 
> factoring.
>   
Sorry, that's not at all what factoring is, and there's no fraud involved.

Factoring is the practice of selling your receivables to a third party,
often at a discount. You get all your money up-front and you don't have
to run after the delinquents. If factoring was illegal then most
collection agencies would be out of business (a scenario that might be
seen as a Good Thing by some). However, factoring is not just used by
collection agencies, it's also a legitimate credit tool for regular
businesses since receivables are an asset that sometimes can be borrowed
against. And there's nothing illegal about it, at least in North
America. (see
http://strategis.ic.gc.ca/epic/site/sof-sdf.nsf/en/so01883e.html).  In
fact, the bulk of factoring fraud is the practise of cheats selling
bogus receivables to factoring companies.

In any case, pooling a couple of small-volume clients to allow them to
be able to take credit cards is hardly factoring.

If your credit card account contract prohibits taking money for others,
then that's an issue you need to deal with through negotiations or
choosing a different credit card company. (Having said that, I can thing
of a number of ways that would allow consultuants to co-operate on this
while keeping within the terms of such a contract.)

The banks simply don't want the grief of super-low-volume accounts, who
are actively discouraged through minimum fees. Being able to combine a
few of these into one reasonable-volume account brings the banks revenue
they otherwise wouldn't have had, so it's hardly defauding them out of
money to do so.

IANAL, YMMV, ETC.

- Evan