

Ask HN:  Monthly vs Annual - Subscriptions. - ChaseB

Trying to decide how to launch a subscription model for my web service.  Monthly or Annual?
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charliepark
[http://37signals.com/svn/posts/753-ask-37signals-how-do-
you-...](http://37signals.com/svn/posts/753-ask-37signals-how-do-you-process-
credit-cards) is a good overview of what 37signals did. My experience mirrored
theirs. Essentially, we wanted to offer annual billing, but when we went to
our processor with that, they weren't willing to assume the risk associated
with that. My understanding might be off, but I believe the rationale is that
they're essentially guaranteeing that we'd be able to offer refunds to
customers who didn't get what they paid for. So if someone pays $30 for a
year's coverage of our software, and we go out of business three months into
that, they're going to want their money (or, at least, part of it) back. But
if we've gone bankrupt, the credit card processor is partly on the hook for
that money.

The CC processor we use (www.braintreepaymentsolutions.com) {and I'm very
happy with them} allowed us to apply for annual billing after we had many
months (7? 8?) of billing under our belts, and they could see that we weren't
super risky.

So, yeah. Look at different scenarios, but recognize that it might not be up
to you at first, and adjust your expectations and projections accordingly.

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jakewolf
I know people who have used paypal for annual subscriptions with no problem.
However, monthly is the most popular option followed by a three month for a
small discount.

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brk
Most credit card companies won't let you charge in advance for an annual
service when you have no track record.

You're pretty much stuck with monthly, or charging yearly in arrears at this
stage.

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byoung2
Why not both? Something like $10/month or $100/year.

