Does PayPal allow this?

I think Paypal will be okay with it so long as you don't have a lot of people asking for refunds or similar. I can think of other cases where people input their paypal email and receive payment.

Now in the case someone disputes a charge, who are they going to talk with? If it is you, what if you are slow to respond?

Probably depends on your system. PayPal does exactly that for other affiliate systems, but I'm sure they have some requirements your system needs to meet.

Thanks for the replies. The problem is that when PayPal responds to my inquiries they are generally so vague and unhelpful and they never actually answer the specific questions I ask them. I've been going back and forth with them for a week trying to get some straight answers...

You are providing the service but the payments are going straight to someone else (your affiliates)? I don't think PayPal will like that.

You will notice most affiliate platforms that use PayPal nowadays are setup using adaptive payments where the customer pays you (the vendor) and then the affiliate commission is automatically sent from your account to the affiliate in the background. So the customer is still paying you, the person providing the service. They created this adaptive payments feature for a reason, I think. They didn't like the very thing you are trying to do. When customers were paying affiliates directly because it's way too hard to keep a track of and causes confusion for the customer when they are paying one person and receiving the product/service from someone else.

You're right, I did some more digging and it looks like I would use their "adaptive payments" API to do what they call a "chained payment" which is just like you said - I receive the payment and then immediately pass all or part of that payment to my affiliate/reseller.

It's just so hard to get any answers from them, and I'm scared to proceed. I've literally had 12 emails back and forth from them and they can't answer any simple questions. I've gone back and forth with them twice just since yesterday when I originally posted this. Hey, at least their support response times seem to have improved over the years!

So basically if I do the chained payment thing, I don't see any possible reason they could have a problem with it, since I would be using their system exactly as they want you to and the way it was designed to be used. For chained payments it even says:

"For example, you might use this configuration in a sales commission application that transfers funds owed for commissions from your account to the accounts of your sales force."

That's all I want to do. The only thing is I would be transferring 100% (or close to it) of what the customer paid in a reseller situation, and I really just want to make sure they are cool with this. I don't get it why they can't answer simple questions lol

Temped to just go ahead with it, but you know PayPal ...

I would watch out for people requesting for refunds, the problem with things like this people can get their money back very easily.