Oh! I've been waiting for a good place to ask this. I made www.stripepal.com as a weekend project. It's a super lightweight wrapper built on top of Stripe Checkout and Stripe Connect. Does anyone know if that makes me a money transmitter or money services business?
Short version: You're a money transmitter, and hence a MSB, if they determine that you're providing payment processing services w/o there being an underlying good/service which is being paid for.
Shorter version: Pick a different weekend project, or your successful outcome is "Stripe disables your account due to fraud risk."
You are as soon as they want you to be. I'm not being facetious. The laws, especially those relating to regulating finance, are written as broadly as possible to give them as much power as possible. If you hit their radar, they can send you away for a very long time.
On top of that, the legal system has little to no understanding of technology and it appears from the cases I've seen (as a layman) that the courts take analogies as fact. Thus if someone testifies "it's like doing X with Y" even though X is very different because it's digital than the literal concrete X, they take it at face value.
This is why scraping data on a public website is treated as if it was breaking into a computer system, because "its like trying all the doors and finding one that's unlocked and then going in and taking the houses contents, your honor!!!1"
There are multiple reasons that you should talk to a lawyer before going ahead with this, not least the cease-and-desist letter you are sooner or later going to receive from Paypal complaining about infringement of their trademark.
The test is whether or not the use of Pal is likely to cause confusion for the goods and services that the trademark was registered for. If this was a service to help you adopt a new puppy, there's little likelihood of confusion. However, if your company has "Pal" in the name and the explicit intent of the company is to provide financial services just like PayPal does, then yeah... you're going to get hammered. It's basically raising a giant middle finger towards both Stripe and PayPal.
Err, I certainly didn't mean to be raising any middle fingers. I've just always thought it was weird Stripe doesn't have a lightweight payment page, considering how simple it was to build this with Stripe Checkout and their automatic email receipts.
I've been sitting on this idea for almost three years, and with time it got so easy to build that I finally took a few weekends out. Here's a post from back when I'd have to build out the checkout experience and receipts myself: https://news.ycombinator.com/item?id=4507050
I'll have to look deeper into this trademark issue though. Anyone have any alternative name ideas?
If the names are similar and they are in the same industry/sector -- so that the typical consumer might confuse them -- then yes that absolutely can and does get attacked as a trademark infringement.
See Facebook versus Teachbook cough I mean Teachquest.
Or Microsoft versus Lindows cough I mean Linspire.
You've basically made cash.me - which is run by Square (squareup.com). And I have to agree with patio11: pat yourself on the back for being as smart as the bright minds Square, have a beer, then pick a new weekend project :)
IANAL. You're using Stripe Connect (and assuming you're doing this the old connect way), its your user's Stripe account that is processing the charge and receiving the money. Your Stripe account isn't processing the charge and nor sending them money hence you're not transmitting anything. Stripe would be the MSB.
This is the interpretation I'm hoping for. I am indeed using "the old connect way" (assuming you mean charging directly instead of through the platform). I wonder if taking a fee has an effect, though.
I pushed a question through to Stripe support. Will update here when I find out.
Even if you get the answer you want, talk to a lawyer anyway. It's not a good idea to just jump into the money transfer services market without a legal gameplan, any more than it is to buy a bunch of chemicals and go into the explosives manufacturing business, or buy a very high quality printer and go into the banknote printing business. IT's not that you're forbidden to run businesses of that sort, but that such businesses involve onerous licensing requirements.
Put another way, your minimum viable product requires some legal infrastructure, otherwise you'll probably discover the hard way that it is not viable after all.
Taking a fee should not have any effect. Stripe (like other providers on Payment Facilitator / Payment Service Provider models) protect you from this risk / compliance
Alternative advice from someone with an anarchistic bent: ignore the law and join the resistance against government. The more people who do it, the less power they have to stop it. People convincing themselves that they need to stay out of trouble and play by the government's rules is what Nietzsche would call internalising the slave mentality, and Foucault "self-policing."
