
Web apps, credit cards, merchant accounts and PayPal - adamcharnock
http://playnice.ly/blog/2011/03/23/web-apps-credit-cards-merchant-accounts-and-paypal/
======
rexreed
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?

~~~
petercooper
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.

~~~
primigenus
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!

~~~
rexreed
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.

------
waterside81
I've heard all the horror stories about PayPal and they probably do deserve
the bad rep they get, but I've never had one issue with them. I've had
business accounts setup within 48 hours with website payment pro with no
problems, no faxes, no further proof of identification. I'm guessing a lot of
this has to do with geography. We're in Canada and maybe PayPal deems us
Canadians low risk? But I find once you give them your bank account details
and you confirm it with them (they deposit two small charges to your account)
then you're in and they have no problems with you.

But alternatives are always nice and glad too see PlayNice.ly being able to
get things up & running.

------
rguzman
Sigh. I wish someone would solve this problem already. I mean, some startup to
do to payments what heroku did to rails deployment.

All the recurring-billing systems only solve half the problem: the logic for
recurring-billing, but it is still fairly problematic to get the other pieces
in place. There should be a way to collect payments on your site without
having to setup a merchant account, et. al. Does anyone know what the
regulatory hurdles to something like this are?

~~~
spyrosk
<http://saasy.com> claim that they have solved this problem but I haven't yet
used them. Does anyone else have any experience with them?

~~~
zefhous
Seems really expensive (5.9% plus $.95 or 8.9% flat per transaction).

I've been getting setup with Stripe. They just lowered their rates to 3.5%
(from 5%) plus $0.30 per transaction. Good API and no other fees. Seems great
so far...

<https://eta.stripe.com/faq>

~~~
norova
Everything was awesome up until this part of the FAQ:

\-- Stripe transfers money to your bank account at the end of the following
month: that is, you receive June's payments at the end of July.

------
primigenus
I've posted this on HN before but in case there's someone here who's not in
the UK or the US, but in mainland Europe and facing the same challenge: we've
been there, it was a headache, and we came up with Spreedly/Ogone/Atos
Worldline. It can be done. Here's our writeup:
[http://blog.quplo.com/2011/01/looking-back-on-the-quest-
for-...](http://blog.quplo.com/2011/01/looking-back-on-the-quest-for-
payments/)

Thanks for sharing Adam, there should be more articles like this!

~~~
kgtm
I've read your post recently, it is pure gold. I wish there were more
resources for EU startups, including handling VAT issues/invoicing/taxes. If
you have any insights for those areas, please, do share!

------
pavel_lishin
Bug: "Hello there, fellow HN user! If you like this post, I'd really
appreciate an upvote. Read more about hacker news by __null __"

<http://i.imgur.com/zXCGR.png>

~~~
adamcharnock
Wow, thank you for pointing that out!

------
mmcconnell1618
I'm not sure about the UK but in the US the major credit card companies are
requiring merchants to pay for quarterly security scans on their site in order
to stay PCI compliant. Personally, I think PCI is racket designed to collect
more money while deferring losses to merchants but in the US it is another
thing to think about when accepting payment. If you go with an off-site
processor (like paypal express) you don't need to worry about PCI compliance
because the card is not actually handled by your web app.

------
Breefield
Related, but not about the actual article. I had quite a headache trying to
find something affordable a while back:
<http://breefield.tumblr.com/post/849621934> I'll be reading through these
comments and links thoroughly to hopefully find something with no setup fee,
and approx. $15/mo fee.

------
lucindastokes
We are just starting this process so this is a really useful article for us -
thank you for sharing your experience. Payment systems are a minefield and a
recommendation from a company that has 'been there and done that' really
helps. We are PlayNice.ly customers and love your web app!

~~~
adamcharnock
Thank you Lucinda, I hope things go well for you!

From what rexreed says, it looks like we may not have taken the easiest route
here, but I hope it provides some insight.

~~~
lucindastokes
Thanks.

I think rexreed's comment may reflect the difference between the US and UK
systems. We want this set up within a month though so I'll see how quickly we
can do it!

------
jroes
I'm curious, why do people avoid Google Checkout? Same reason as PayPal?

~~~
sjs382
I'd stay away due to the inability to get a hold of support personnel at
Google, but that's just me.

------
ulugbek
rexreed is right, it shouldn't take long to set up the system. Most of the
time is wasted waiting to get approved. I integrated Braintree api in half a
day, while the application process was taking a few days. We had to drop them
and go for paypal because it had a masspay option, otherwise we are looking
for ways to avoid using paypal.

------
jamesstokes
Excellent advice from the guys at PlayNice.ly.

