Comment by rexreed | Hacker News Reader

Comment by rexreed | Hacker News Reader

I'm surprised it took this long and cost that much to get the merchant account and recurring billing setup.

We have an Authorize.Net merchant account, use Recurly for subscription billing, and found our merchant bank using FeeFighters (ended up going with Merchant Focus).

It took us less than 2 weeks from start to finish, paid $0 in setup fees, ended up with a transaction discount rate from 1.75% to 3.1% depending on card type (Merchant Focus uses interchange-plus pricing), and we accept all major card types. Not only that, there is no delay or holds placed on our account. We were able to accept paying customers within 2 weeks of setting up our accounts, and we only pay the Recurly monthly fee, a $15 Authorize.Net gateway fee, merchant account transaction fees, and a $7.95 a month Amex fee (their monthly minimum). All in all, I think we ended up doing well and wasting little time.

I'm not sure why it would cost a few hundred dollars and take as many weeks/months as it did in the OP's case. Perhaps because it was a non-US company?

It's a different kettle of fish in the UK. It's a lot easier to get a merchant account for a non-established business in the US. While the British banking system has become incrdibly liberal in the last 20 years, it still lags in the merchant account department and you have to do a bit of legwork. It's not uncommon to need to send a business plan or spend time on the phone convincing a provider of your worth, for example.

It's different in the UK but it's even worse for mainland Europe. Many subscription billing services don't support businesses that don't have a registered bank account or address in the US or UK. Many payment gateways won't work with you unless you're located in the US or UK, especially the larger American ones like Braintree or Authorize.net. And unfortunately, it's these larger ones that have solved most of the integration and vertical problems that you end up still having to face in Europe. So you end up having to settle for a second-rate, customer-unfriendly, enterprise-oriented, backwards payment gateway like Ogone or Atos Worldline (both of which we had to settle for). The only reason these guys are still in business is because the American services haven't spread to Europe yet.

Thankfully, Spreedly does support European payment gateways, and that's why Spreedly kicks ass.

I remain stunned that neither Google, Amazon, or PayPal have brought serviceable solutions to the continent yet. It's 2011, for Christ's sake!

Maybe it's European banking regulations and laws that are the reason for a) the current sad state of affairs and b) the inability for Google and others to enter the marketplace? I don't know much about the situation, but given the size of the market, I wouldn't be surprised if that's what's getting in the way.

The fact that there's such trouble in handling something as fundamental as getting payments from customers really imposes a significant impedance on tech startups in the region. I can see why some Euro companies are compelled to relocate when they want to seek significant, unimpeded growth.

We techies live in a borderless world, but alas, the rest of the world doesn't. Sigh.

Amazon have no plans to do so in the near future either, their AWS Evangelist Matt Wood told me so last week at their London conference.

I wholly agree, certainly don't try to obtain a merchant account for an online travel agency, we were viewed alongside porn and gambling.

On a more recent note though I have been looking for a marketplace merchant solution, Braintree and Amazon flexible payment service are pretty much the only real solutions out there for my needs. Braintree requires I have a US registered company and a US office (I'm working on that part for the application) and Amazon has no plans to extend FPS to the UK (the answer coming direct from the horses mouth at the AWS conference I attended last week).

Is it any wonder with constraints and lack of VC funding in the UK that the country cannot garner growth and has lost it's ability to be a leading entreprenuerial force.

Agreed. Though I don't find it too surprising. The UK is merely a fifth of the size of the US, has localization requirements, and has a conservative populace in relation to tech issues (where's the UK's Reddit, Facebook, or Y Combinator that has gathered serious traction or name recognition?)

Care to do a write-up of your setup, the decisions you made, and your recommendations (which services you ended up using)?

It would be pretty valuable, to me at least.

I think he pretty much has in his post already.

Feefighters, Recurly, Authorize.net, Amex

It's exactly what I just said:

* We used FeeFighters to find a merchant account (ended up going with Merchant Focus). FeeFighters gets you a bunch of competitive bids. We only looked at the top three recommendations, read the reviews, and ended up going with the #1 recommendtion

* The application took one hour to complete, and was done entirely online. We followed up with a phone call to Merchant Focus to help expedite the app. It was approved and completed within 24 hours. No set up fees. Very competitive rates. No monthly minimums. Just a gateway fee and an Amex minimum plus the per-transaction fees.

* We had our Authorize.Net login within another 24 hours. We got any holds removed. I forgot how this happened, but it didn't seem that it was a huge hurdle.

* Once we had the Authorize.Net login, we signed up for Recurly. It took one hour to sign up.

* Integration with Recurly took a few days.

That's it.

Useful links: http://recurly.com - great for recurring billing

http://feefighters.com/paypal-calculator - easy comparison tool to see if PayPal makes financial sense for you (it might)

http://feefighters.com - choose a merchant account (merchant account will set you up with a better deal with Authorize than you could get by going to them directly)

(disclaimer, I'm with FeeFighters). Also though, I can help... drop me a line (email in profile) for more personal service.

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