Legal to have an online credit based system? - UK Business Forums

I have been involved in similiar set-ups (I am not a lawyer). It can become complex. Because you then have the issue of VAT. The individual users may not be VAT registered but then you could go over the limit.

You can simplify it by basically you sell all the credits and as far as the customer is concerned they just deal with you. The author of the game then has to invoice you for their share when they want it.

This leaves you liable to refunds/chargebacks etc. Simple reselling set-up.

Alternative is you could act as an agent Where you are billing but purely for someone else so the purchasing contract is between the end user and the app developer. But you still have to manage chargebacks/refunds. This is more complex.

Personally in both cases I worked with option 1 was chosen. With terms and conditions that allowed for fund holds for so long to cover chargebacks and certain service levels that had to be achieved.

Most solicitors didn't want to get involved in option 2.

Source: http://www.ukbusinessforums.co.uk/forums/showthread.php?t=302161

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