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Comment by tow21 | Hacker News Reader

With all due respect and without being snarky, your steps are wrong. Try these ones:

1. Register a business (Ltd, LLC, etc)

2. Open a Business Bank Account

3. Implement Paypal to get yourself up and running,

4. Prove that there's a market for your product, people will pay for it, people will continue to pay for it, you don't have lots of chargebacks, you're capable of managing sensible customer relations, and generally are as small a risk as possible for any merchant account. As a bonus, this also validates your business plan before you invest too much time in irrelevant admin.

5. Go and talk to your bank. And every other bank out there. Shop around, shop around, shop around.

(As an aside, read David Mytton's blog: http://blog.boxedice.com/2009/05/20/taking-payments-online-m... )

6. Profit!

EDIT: fixed formatting

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I've used Paypal before and they've been nothing but hassle. Getting your money down from Paypal is often the hard part. The random freezes, and goodness knows what else.

I'm not advocating using them long term, I'm advocating using them to get yourself off the ground. There's no setup cost, and integration is fairly trivial.

It almost doesn't matter whether you can get your money down from Paypal. It matters whether you can persuade people to hand over their credit card. Not much point worrying about anything else until you can prove that, and paypal is a very cheap & easy way to manage that.

The reason we did not go for Paypal first was handling the transition from Paypal subscriptions to a different payment gateway would be a pain. We didn't want two sets of funds. Knowing possibly we would probably not get our hands on the Paypal funds for a good 5 months.

Using an "abstraction layer" like Recurly or Spreedly would solve this problem for you (although you would have to convince PayPal to accept payments without CVV numbers, which is an extra couple of hoops)

Why not have both? I wonder if your concern is pre-mature optimisation as well.

I don't have any hard data, only my own experience, but I think some customers prefer PayPal. I added it as a payment option to one site and they now get approximately 30% of their payments through PayPal.

Yeh; but there are numerous alternatives. Nochex, Moneybookers, Google Checkout, 2CO

Take your pick :)

So do any of them support you if you live outside the US/UK?

2CO do, they're used by a number of startups based in Asia and South America

This. A friend of mine used Chargify and Paypal to launch a subscription-based product. At ~£1000 a month revenue he started shopping around for a merchant account and banks were actively bidding against each other for his business.

Banks aren't daft. When they provide you with a merchant account, they're taking a significant risk. If you can't show any evidence that you're a real business, they'll want a fat deposit. It's not hard to prove to them that you're a proper business - the fact that you haven't bothered is cause for concern.

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