Side-question: what's the cheapest way? That is, requiring the lowest transaction fee.
The cheapest is to use a service like Paypale/FirstData/etc which are a bit more tricky to setup that the cheddary/spreedly but also offer recurrance charging. The catch is you'd have to keep track of the user data and management, and slighly more tricker to change providers .
Do you guys have any idea which one of those three are the biggest? Because I would assume the one with the most customers is the most reliable one... Even though that logic might be broken.
If, as it would seem from your profile, you are in Iceland this will be especially hard since you'll probably need an American entity with a bank account to be able to use many of those systems.
As for our pricing, it's actually very competitive. It may look higher because we disclose all our fees. Nearly every provider we know of obscures fees both during the sales process and in the monthly reporting statements so merchants never really understand what they're paying. Here's an example of pricing trickery http://bit.ly/9NSZCa .
Prospective customers regularly do thorough pricing comparisons and we are consistently among the most competitively priced.
IF YOU TERMINATE THE AGREEMENT WITHIN THE FIRST 3 YEARS FOLLOWING THE DATE OF YOUR EXECUTION OF THIS AGREEMENT (THE “PAYBACK PERIOD), YOU AGREE TO PAY DE-CONVERSION FEES OF (I) TWO HUNDRED FIFTY DOLLARS ($250.00) FOR EACH MERCHANT LOCATION and (II) AN AMOUNT EQUAL TO THE STORED VALUE TRANSACTION FEES INCURRED BY YOU DURING THE CALENDAR MONTH IMMEDIATELY PRECEDING TERMINATION, MULTIPLIED BY THE NUMBER OF MONTHS REMAINING IN THE PAYBACK PERIOD. IN THE EVENT THE PAYMENT OF SUCH DE-CONVERSION FEES IS LIMITED BY APPLICABLE LAW, THE AMOUNT PAYABLE TO US PURSUANT TO THIS SECTION SHALL BE LIMITED TO THE MAXIMUM AMOUNT PERMITTED UNDER APPLICABLE LAW. SUCH AMOUNTS WILL BE FUNDED, TO THE EXTENT POSSIBLE, ACCORDING TO THE SAME METHODS FOR COLLECTING AMOUNTS DUE UNDER THIS AGREEMENT. We reserve the right to place you or any person owning or controlling your business in the MATCH file (Member Alert to Control High-Risk Merchants) maintained by Visa and MasterCard in the event this Agreement is terminated for cause.
Since that language is in there, we have always provided an addendum to the agreement that provides assurance to merchants that they can cancel whenever they want without having any termination fees. The addendum is located right next to application and is completed with every new customer that signs up. It states the following:
"WHEREAS, Braintree wishes to assure Merchant that Merchant will not have to pay any termination fees for the Merchant Agreement with Braintree or any of the processors used by Braintree; NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: Merchant may terminate the Merchant Agreement with Braintree, and any processor utilized by Braintree. If Merchant exercises this termination right then Merchant shall not have to pay any termination fees."
We have never had contracts and have never charged a termination fee.
We're with SecureTrading in the UK and I can confirm that they have no "hidden fees". This is scaremongering at best. Braintree is expensive. You may have good service (so I hear), but don't make claims of being "competitive". You ain't. Braintree is a premium payment provider that costs extra compared to the competition.
In terms of your other comment regarding scaremongering, that is not our intent. We're just trying to raise awareness of hidden fees in the industry. We see it all day every day in competitor proposals. Credit card pricing is inherently complex and difficult to present to merchants. We've tried to simplify the complexity of pricing and buying merchant services by posting our pricing online and not hiding any fees. We try to raise awareness because at times it feels like we're the only provider out there that doesn't hide fees. I am sure that there are other providers that do not hide fees or present them in a way that hinders a merchant from properly understanding rates they'll pay - we just rarely ever see it.
The fastest and cheapest way to set it up is Paypal subscriptions - I have done this many times using their IPN notification system. But I'm afraid to do it again because they keep screwing over websites (google it for the horror stories), so while I'm tempted - it's probably better to go the Spreedly/Chargify route at this point.
'From scratch' it has taken close to 60 days - creating a company (LLC), securing a bank account, having the bank verify your physical location (even though you don't have one - don't ask) - total about 20 days.
Next, FirstData for the merchant account - talk to an account manager, then fill out a paper application, which leads to an online application via a relatively inflexible javascript-heavy website, then faxing supporting documentation, then applying for a state DBA license because the company name and the physical name don't match. Then, faxing personal bills with addresses that must match the physical address of the business address, even though there isn't one. All-in, this phase took about 20 days.
Next, website edits - They didn't like the word 'forever' on the pricing page, because it was too open ended. This phase has taken about 10 days.
We think we'll get it all done this week, at this point we're just waiting for an answer, but we had no idea how long it could take.
Swombat wrote great article on this: http://news.ycombinator.com/item?id=530055
The issue of long-term viability is a valid one... I would ask the same thing when evaluating vendors, and, in fact, I used the same logic in choosing to join Chargify last Fall.
I really like my co-founders' 6-year history running Grasshopper.com, and they architected things right - based on roughly 10 million telephony transactions that their existing system rates each month.
And, for what it's worth, my first company is still selling Basic Stamp computers 23 years after we founded it, and Engine Yard is growing every month.
I can speak for all 3 founders of Chargify when I say that we enjoy building utilitarian businesses that deliver good value over a long time.
Thanks!
--- Lance
However, if you want to go down the road of building this yourself, it's not really that involved. Take a look at ActiveMerchant if you're doing Rails. It helps you integrate with a good list of payment gateways. Then, sign up for that gateway + get a merchant account. This is probably the best way to get the lowest fees.
For example, I believe CDGCommerce offers merchant accounts at $10/month with a free payment gateway. The typical $0.30 + 2.9% (or whatever your rate is, depending on risk, etc.) applies.
Another path for this is Website Payments Pro via Paypal. With IPN you can easily sync your user subscription status with the latest payment information.
Doing recurring billing via subscription fees, like all programming is handling corner cases. For this domain, the corner case is a combination of invalid credit card numbers, expired numbers, perpetual zero-balance but valid numbers, overzealous anti-fraud filters, overdrawn accounts, or even temporary credit card numbers. Which ever service or integration path you choose, make sure you're covering the these corner cases.
Based on all this, my advice is to build in-house so you have the flexibility of changing policies on-the-fly with regards to how you handle those above cases. YMMV.
There are several items to consider when choosing a subscription billing option. Many have already been mentioned (cost, implementation time, the country you're doing business in) but you should also consider the size of each transaction you're doing.
Will you be doing lots of small transactions? Fewer large transactions? The answer to that question will have a big impact on the fees you'll pay for the off the shelf solutions (as well as your merchant account/payment gateway).
In addition to transaction fees, there are a number of other hidden challenges and "gotchas" to be aware of when billing online. You can see some of our suggestions on our blog here: http://blog.recurly.com/2010/01/lessons-learned-in-online-su...
Recurly also supports the largest amount of international payment gateway (you can find the full list here: http://support.recurly.com/faqs/payment-gateways/payment-gat...
Let us know if you have any other questions we can assist with, we're happy to help. Thanks! Tim
If you want to get from zero to charging ASAP, this might be worth considering. You could probably be integrated in a day or so. They are mainly geared toward downloadable software vendors, but I just use the "serial code" field as an Activation Code that the user enters into their profile page.
BMT Micro's royalty rate is around 10%, have awesome customer service, and just added a recurring option. The main downside is limited control over the template. I would also look into FastSpring since they are newer and seem to have more flexibility with the store configuration.
That said, personally I'd start with PayPal, see if anyone gives you any money, and the moment users start paying switch to a proper merchant account and CC processor ;)
I'm currently planning on using e-junkie but its kind of a piece of crap. Looking for a slicker integration similar to spreedly or chargify.
I posted the same question 10 days ago :P
No, Paypal's thefts are not generally about issues with Visa/MC, but rather with Paypal unilaterally deciding that an account is "fraudulent", and Paypal deciding to permanently keep all funds in that account. This is in addition to their broken dispute resolution process as well. Using Paypal is a risk that a corporation should be required to disclose to all investors in bold print. "WARNING: THIS COMPANY USES PAYPAL TO PROCESS PAYMENTS AND THUS MAY BE PUT OUT OF BUSINESS AT ANY TIME WITHOUT NOTICE."