Since the beginning of this year, we’ve fully switched up our company classification to a financial institution, which was needed to run a real escrow service. Before this change, we had to get creative with invoicing which presented many problems. Now that we’re fully entitled to do what we do law-wise, we have to make significant changes to our Terms of Service and our Transaction Contract. Also, to comply with local and state laws, we have to make the following changes to the way we invoice buyers and how we conduct business.
Buyers/sellers - Invoices are officially your responsibility.
We, as a company, cannot any longer invoice buyers for the full amount of their payments. That gig is over. Whether you’re in the EU or anywhere else in the world, if you’re buying on SWAPD, you can only get invoiced for our services (which is our SWAPD fee).
Wait, what? I thought sellers pay the fees.
Yes, and that won’t change. However, since buyers are in fact the providers of the funds which we count as our fee, they’re the only legal entity in a checkout ticket who may receive a taxable invoice. The sellers will still receive what’s owed to them minus the fee. I know this may be confusing, so here is an example.
- Buyer/seller starts a checkout ticket for 1000 USD.
- The buyer pays SWAPD 1000 USD. But, the true cost of that transaction is 920 USD for the item purchased and 80 USD SWAPD fee.
- We send the seller 920 USD and invoice the buyer for 80 USD.
If the buyer wants to receive an invoice for the rest of the funds (920 USD), then he has to DIRECTLY ask the seller for one.
This is crazy? Why?
Because the law tells us to do it that way, that’s why. It prevents double taxation for the buyer (if he is an EU resident where VAT may apply) and it’s the way the big dogs do it (like Escrow.com, for example).
So sellers are responsible for fess but buyers pay them?
To be fair, buyers are the remitters of the payments so they ALWAYS paid the fee, it’s just a matter of how you look at it. We could separate the two and force sellers to pay us our fee while buyers paid for the item. But that would double our workload, increase wait time (waiting for two payments), and generally slow down transactions.
These changes will roll out in the upcoming days.
Please give us some time to work out the details and update our website. We have to rewrite many pages/etc so it will take a while. But prepare yourselves that next week, asking buyers/sellers about a possible invoice before a ticket starts would be a wise idea. Not everyone can issue invoices, nor not every buyer may want to receive one. It’s a problem we will have to tackle somehow.
Step one: Taxes and invoices
Step two is to create generic B2B and personal invoices for members to download to those who may need them. We’re also in process of changing our Transaction Contract + Terms of Service.