Instant Affiliate Payments

There are some scripts out there that will allow you to “pay affiliates instantly”.

What this essentially means, is that the “seller email” in your Paypal button, is actually replaced with your affiliate’s Paypal email id. Which means the payment from your buyer is going straight into your affiliate’s Paypal account, not yours.

This means that when your buyer looks at her Paypal account, it does not say payment made to you “John Seller” (you), but to “Joe Affiliate” (your affiliate).

This is a poor business practice on so many levels.

1) Customer bought a product from you. Why is her Paypal account showing that she just made a payment of $97 to “Joe Affiliate”? Your customer is thinking, “Wait a minute… Who the heck is Joe Affiliate? I did not buy anything from any Joe Affiliate. Why is my Paypal account showing that I paid him money? HELP!… Fraud… Paypal Dispute… Scammer… I want a REFUND!”. Well, that’s what we would think too if we bought something from one merchant, and saw the payment going to someone else.

2) What happens when your customer wants a refund? Now you’re going to have to ask Joe Affiliate to return the payment, because you never got it – he did. What if Joe Affiliate doesn’t respond on time? What if he doesn’t return the money on time? What if he doesn’t want to return it at all? Will you hold up your customer’s refund, or are you going to keep paying out of your pocket and “hope” that Joe Affiliate returns your payment to you this time, and not to the buyer, because you have already send the buyer their money back?

So yes, this is just bad for business. Not to forget, looks extremely unprofessional on your part too.

The only way to properly handle instant payments, is by using Paypal’s Adaptive Payments technology, which allows you to do something called “Chained Payments”. And using Chained Payments, your customer always pays YOU first. And you can set up a chain, so that as soon as their payment hits your Paypal account, Paypal in turn will instantly send a money from YOUR account to your AFFILIATE’s account. So Customer pays you, you pay the affiliate. And that’s how it should be.

Anything else will only get you in trouble with Paypal, maybe even get your account banned, piss your customers off, dilute your brand, your reputation may get trashed, and just about everything that is not good for your business could happen.

Now DAP does allow you to instantly ‘credit’ your affiliate’s account with the payment due, but you still have to push a couple of buttons before the affiliate can actually get paid.

And that’s how it’s going to be until we develop support for Paypal Adaptive Payments (which has its own complications, by the way).

What is your take on this? Feel free to leave your comments below.

Click Here to Leave a Comment Below 14 comments
Dirk - October 18, 2010


this all sounds good what you call “Paypal Adaptive Payments” but I have no idea how this should work and if it works as you describe wouldn’t Paypal take 2x the paypal fees when they forward the payment to Joe Affiliate?

This would deduct the profits for the affiliate or even more for the original seller since he would have to pay the fees on his own that Joe Affiliate still will get 100%.

Do I think correctly or how does the PAP thing work? I searched at Google but couldn’t find an exact answer.
I am no newbie with those things but also not too experienced that I could say I am a developer. šŸ™

Kind regards,


Ravi Jayagopal - October 19, 2010


DAP doesn’t integrate with Paypal Adaptive Payments at this time. But you can Google it if you wish to learn more about it.

We don’t recommend the RAP model (as we understand it). If we ever got the itch to do instant affiliate payments (which we probably wouldn’t any time in the foreseeable future), we would rather pay extra fees to Paypal, than let the buyer get confused about who they actually sent the payment to (was that you, or your affiliate?).

No meaningful company will allow their buyer’s payment to directly go into an affiliate’s account. That’s just insanely bad for business, in so many ways, the popularity of the strategy notwithstanding. Not Amazon, no Google. Heck, not even e-junkie or ClickBank. It is just not a viable business model to pay out thousands or tens of thousands of dollars in commissions when the buyer has 30-60 days from the time of purchase to get a refund.

If you must do it, then at least absorb the money first, and then pay the affiliate from your account. Even that is a better move than the former.

Dirk - October 19, 2010

Hi Ravi,

I can understand and respect your opinion about the instant payment system RAP and a few other tools provide but I can tell you from my experience that the RAP system is working VERY well. I am using it at one of my websites at
for more than 2 years now and affiliates love the way it works because they won’t feel like affiliates more like product owners and get instantly paid for their promotion.

Customers won’t be too much confused why they pay Joe Affiliate since they will get emails from Joe Affiliate about the product and have a relationship with him.

Of course it can sometimes happen that someone asks for a refund and then an additional step is required that they receive it but this is still better than paying Paypal fees two times. From my experience the number of unsatisfied customers compared with the satsified customers is VERY low and sometimes my site ranks at 5k at Alexa which shows that customers who are automatically becoming affiliates love to promote for 100% commissions.

I know several respected marketers who use the 100% commission system and all them them are earning a nice 6 figure a year.

I think you could offer this instant payment option too at DAP and let your customers decide if they want to use it or not. It shouldn’t hurt your business practise and only makes DAP better known in the IM world. The same problems could happen for users if they run the 2-tier affiliate program you announced to launch in any of the future upgrades since Paypal hates such systems and already closed many Paypal accounts for this reason and then users will be responsible for deciding if they use this feature or not.

If I would have known DAP earlier I wouldn’t have spent so much money on systems like MemberWing, Wishlist or even another one which cost me about $850 with nearly the same features DAP provides. I even let a programmer create a membership script for me and already paid more than $2800 for development but now I can see at your features list that I could have those features for a fraction of my cost. šŸ™

I am still watching all your videos and when I find out that it will work the way I run several of my membership sites you’ll have another satsified and happy customer in me.

Kind regards,


Don - November 22, 2010

Biggest benefit to me with the RAP way is no 1099s for affiliates. That is a big deal… I love the features listed in DAP… But I prefer not to have to worry about affiliates at tax time.

Ravi Jayagopal - November 23, 2010


If 1099’s are your concern, then you’re actually better off with ClickBank or e-junkie, who do those things for you, and do it very well too. In fact, ClickBank’s main two pluses are exactly that – their affiliate army, and the fact that they handle all of the affiliate payments.

Using CB or e-J takes the 1099s off of your hands, while at the same time, avoids all the unpleasant cancellation & refund issues that come with using a solution like RAP. Plus it helps you look way more professional in your customer’s eyes, because they won’t be confused that while they just purchased from Don, their Paypal account says they actually paid some unknown Joe.

Ravi Jayagopal - November 23, 2010


>>I think you could offer this instant payment option too at DAP and let your customers decide if they want to use it or not. It shouldnt hurt your business practise and only makes DAP better known in the IM world.<< You are certainly right about that. At some point, we will implement this, and let the DAP users decided for themselves. This certainly seems to be a very popular feature in some IM niches, so we would love to cater to them too. Appreciate your feedback.

Dirk - June 17, 2011

Hi Ravi,

do you already have any newsabout the instant commission payment system using Paypal Adaptive Payments?

I am sure many marketers are already waiting for this and possibly would buy DAP if this option is available.

I have seen another plugin which already successfully works with Paypal API signature. You can see it at
The only difference is that it still has no membership feature but this is in the works. I hope you’ll be able to add this feature soon that I can order DAP and use it. šŸ™‚

Kind regards,


Allan - August 31, 2011

Hi Ravi,

I concur with Dirk, I would like to see the PayPal Adaptive Payment / Instant Pay system included in DAP. And of course, allow the user to use or not use the system.

The ability to not deal with affiliate 1099 forms is very appealing.


Kirk Ward - November 2, 2011

I would only worry about refunds for products I sell at high dollar prices and for which I am directly collecting. The CJ model is good, possibly I make a wholesaler & retailer relationship very clear to the buyer, even customizing the delivery page to say “You bought this from”X” and I am their drop-ship vendor who is delivering for them,” or something along that line.

If a particular affiliate has a refund ratio significantly higher than the norm, then I would think seriously about terminating the affiliate. I do like the idea of PayPal handling the 1099’s. It is a pain in the gazithka, and I used to do them for others when I was an accountant.

GILAD - January 31, 2012

One, very important, thing that I don’t get about chained payments is what the meaning of “payment pass through YOU first mean”.

Because if it means that the buyer paid 10 $ and I get only 5$ into my account and two secondary receivers get 2$ and 3$ but the buyer only see me as the one he paid to 10$ that excellent, it mean that when I have to show the books to the IRS in my country they only see that I got 5$ and tax me accordingly (which is 100% fair).

But if it means that I get 10$ and then from my account it take 5$ and deposit them in the secondary receivers account-it’s a problem. In this case the IRS will ask me to prove that I only got 5$ and that the transaction of the other half of the money didn’t serve to buy goods for myself and etc.

I work with freelancers and sell services, I can’t ask my freelancers to issue my an invoice-not all of them can do it.

So my question is if chained payments solve this issue.


Ravi Jayagopal - February 2, 2012


It means that the buyer pays you first, and then all other payments are sent from you to the others internally, without the buyer having any knowledge or indication of how the actual payment is getting split.

So for every payment that goes through your account, you’re responsible for the accounting.

If you want the payments to be split at the source, and you getting only your share, and everyone else gets their share directly from the buyer, then you’re looking at “Parallel Payments”, and the buyer will know about and will have to approve before the purchase, that the actual payment is being shared between X people. And that could seriously kill conversions.

Channing - February 18, 2012

When will Instant Affiliate Payments be ready? Also, do you plan on developing some kind of way whereby sites can have “sellers” or “contributors” and “affiliates” at the same time? This would allow DAP users to make their sites like a JVZoo site or DigiResults site.

Heather Claus - January 14, 2015

I’m also curious about instant affiliate payments. I use JVZoo for primarily that reason.

Veena Prashanth - January 14, 2015

>Iā€™m also curious about instant affiliate payments. I use JVZoo for primarily that reason.<< Great Question. It's on our to-do list. We certainly hope to add it to DAP some time in future (maybe in 8-10 months). It's a lot of work and we have other higher priority items at present. Thanks, Veena


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