Ask HN: What is your experience with payment providers as a startup?

[sourc3]

This question is for those of you who charge customers on a recurring basis.

I have been looking for a payment provider for my monthly subscription based service.

There are some services like Spreedly however the charges are not justifiable by a startup that is just getting traction.

So far I have looked at Amazon Payments, PayPal and Spreedly.

Is there any other one that you can recommend? If not, what was your experience with PayPal/Amazon?

Thanks in advance.

[atldev]

I just went through this process to select a recurring payment solution for my enterprise SaaS service, http://SharedScore.com

After evaluating the options, I went with a merchant account linked to a free business checking account, Authorize.net (http://www.authorize.net) as my payment gateway, and Chargify (http://chargify.com) as my recurring payment processor. So far I'm loving it and it only took a total of 4 days (including Sat and Sun) from setup of the business checking to first dollar processed. And the monthly cost isn't much at all (covered by 1 or 2 subscriptions).

Here are some points I learned along the way: - There are a number of solutions available. This is a good feature comparison: http://thinkvitamin.com/dev/reoccurring-billing-for-web-apps...

And here is a good cost breakdown: http://blog.glendenin.com/chargify-vs-spreedly-vs-cheddarget...

-I found it very easy to work with an Authorize.net reseller. There are many hoops to jump through, and they help speed the process.

-You'll probably need to include the CIM (customer information manager) feature of Authorize.net to support recurring payments. It is an additional $20/mo, but it eliminates the need to store data (read: no PCI headaches).

-It is a lot easier if you already have a site up and running, because they are going to verify things like cancellation and refund policies, terms of service and contact info.

I'll be selling mostly to corporate buyers, so Paypal Payments Standard wasn't an option. Payments Pro may have worked, but I had heard some horror stories about funds being frozen, etc. So, I decided to go the "difficult" route and setup a real merchant account. Good news: it wasn't difficult at all.

[Travis]

Haven't used Amazon payments or Spreedly, so I'm not familiar with their cost structure.

What're you looking for, primarily? Same recurring payment month after month, for the same amount? I think Paypal has a recurring charge option that would be good.

Otherwise I'd suggest using AUthorize.net. They'll get you a little bit less than paypal, in some circumstances. They offer a Customer Info Manager (CIM) that allows you to store a reference to a credit card, so you can charge it in the future again (even for a different amount, which is nice if you expect people to move up or down on your pricing plans).

Basically expect to pay around 3% for processing a credit card. Not sure what the companies that do your recurring charges will add on top of that for the funcitonality that they offer.

[sourc3 → Travis]

I want a simple way to just set up the plans and have my users redirect to the payment provider's site to put in their card info and get charged.

I would like to get notified when new subscription starts/plan changes/gets cancelled. I want to minimize the amount of code I have to write to do all this since there is already a large list of items I need to address.

I guess so far Amazon and PayPal are the two candidates.

I think Amazon has better rates and API. I would like to get your opinion on the brand image of both companies too. I am afraid when people see the Amazon logo to make a payment they will freak out thinking that the application will be stealing their Amazon information. What do you think?

[Travis → sourc3]

Regarding their reputations:

Paypal is probably what people associate with online payments. However, there are a LOT of people who have been ripped off or treated poorly by paypal or scammers. So while it has a broader reach (WRT users making payments), it also doesn't have as good of a rep as amazon.

Amazon is consistently at the top of customer satisfaction surveys. People don't generally think of them as a payment source, but this is just the current state of affairs. With their "passphrase" option, and other saas / iaas / services, I think the shift is swinging so that people realize amazon is everywhere.

I'd go with amazon. Paypal customer service SUCKS. Paypal support (even dev support, IME) SUCKS.

I've never had anything but happy thoughts about amazon.

[sourc3 → Travis]

I pretty much started thinking along the same lines too after I talked to a couple of people. It seems like their pricing structure is exactly the same as PayPal and their API is pretty good. I will most likely go with them in the next couple of weeks. I might even release a little open source library that adds a thin layer on top of what Amazon gives to enable ASP.NET MVC integration. Thanks for all your help!

[sourc3]

I looked at the fee structure, right now it looks like getting the merchant account is the first step.

Although I already have a business bank account I have not heard/come across "merchant account"term in any of my contracts.

It looks like this process would add another $100/month cost to my operating expenses. I guess just to avoid that I'd rather go with Amazon or PayPal.

In terms of switching from PayPal to Recurly, would one lose all the subscription information? It's one thing to want to save money but losing subscriber information is a no no. Can anyone comment?

rmoriz and atldev, thanks a lot for your input so far!

[rmoriz]

recurly.com is another subscription payment service.

I guess it depends on the support of your preferred merchant account/aquirer and fees.

Spreedly, Chargify and Recurly are from a feature comparison view 95% the same.

If ~100$ a month is too much for you at the moment, go with paypal but do not waste too much time with their API. I would try do switch as early as possible away from Paypal.

If you do ruby, using any of the three services mentioned above is a pleasure to use. Paypal is not.

[garazy]

PayPal is by far the best option at least outside of USA and UK. It is free to setup which is great for a startup.

[sourc3 → garazy]

I am in the US. What was your experience with PayPal for a recurring payment business model?