I'm not seeing how a referral deal would be a "one time fee" at all. In my mind, it would be recurring based on the number of click throughs or sign-ups or whatever.
He doesn't want to be an affiliate, he wants control of it all.
And my point is that this is where greed can sometimes bite you in the ass.
It would be recurring assuming he gets a certain amount of signups each month. But in month 2, he no longer gets that money from the customers - that goes straight to the other company.
He may get a one-off payout of $100 or so per signup, but if he had his own service he would continue to make money from the original signups while gaining new ones each month.
a good traffic deal pays based on the turnover generated at the destination site, I'd definitely pass on a 'one time fee' per signup, unless it is very substantial.
He doesn't want to be an affiliate, he wants control of it all.
And my point is that this is where greed can sometimes bite you in the ass.