Merchandise Payment/Fee Flow
Using Jamroom
The best way to use paypal to do payouts was the 'masspay' system where you upload a CSV file. It used to be a $1 charge for all the transactions, but think that info is quite old and remember they were shutting it.
Looks like the fees structure now is different:
https://www.paypal.com/cgi-bin/webscr?cmd=_batch-payment-overview-outside
https://www.paypal.com/webapps/mpp/mass-payments
Quote: 2% transaction fee, capped at $1 per payment.
Your recipients pay nothing to receive payments and there's no setup fee or monthly fee for you. You pay a low transaction fee of 2% for each payment, capped at $1 per payment. So if someone is lucky enough to receive a $10,000 payment from you, your payment fee is only $1*. And because you save money on postage, stationery, and the time it takes to mail checks, Mass Payments could help reduce your operating costs.
so might be better to payout only when their account limit exceeds a reasonable amount.