

Ask HN: Impact on sales of using external site for payment processing? - matt1

Seems like there's two options for processing payments:<p>1. Integrate a payment system into your app (so the user is actually typing his credit card number on a page within your site)<p>2. Use an external site to process the payment (such as linking the person to a Paypal processing page)<p>PROs of using Paypal:<p>- I don't have to mess w/payment processing<p>- Paypal is viewed as a trusted third party (though some people might think that their credit card info is sent to me through Paypal anyway, which makes this a little weaker)<p>CONs:<p>- People might think they need a Paypal account<p>- Extra step in payment process<p>- More difficult to integrate smoothly into the registration process (my app's customers will register/pay at the same time for use of the service)<p>Has anyone tried both options to see which results in higher completion rates?<p>Edited to add: I suppose it matters a lot who the audience is. In this case the site is geared toward computer savvy people, which makes me lean towards Paypal all things considered. Also, I'm going to just make it a one time payment which will be slightly higher, but I think more people are willing to make a larger one time payment than signing up for a monthly service -- thoughts on that?
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babul
Just a word of caution on PayPal, being as unbiased as I can.

I have had first-hand experience, on behalf of numerous clients, with problems
that can arise with PayPal and some of the crazy things PayPal do out of the
blue and without reason (see sites like <http://www.paypalsucks.com> etc. for
examples) and always suggest using other methods for anything but low cost
products where a chargeback/dispute won't bother you (if you get 2-3 disputes
in quick succession, PayPal typically freeze your account and all monies in it
for 180 days and even if you jump through all the hoops they set thereafter,
will in most cases not unfreeze your account for as long as they possibly can
- which is very bad for cash-flow if you are a business).

Although low-cost products and small payments for web-services (which being
intangible goods are not covered by PayPal seller protections anyway) may be
less likely to incur problems with PayPal (especially chargebacks), mainly due
to the buyers/users being less likely to complain over what are trivial or
easy to resolve matters (e.g. shipping delays or miscommunication) and being
more honest in general when compared to those in higher value transactions, I
would always suggest using a merchant account or service such as protx for
online payment processing and repeated billing.

These generally provide a better quality of service anyway, and when things go
wrong respond faster, follow legal guidelines and regulations, and are more
likely to fight for you than PayPal which _will_ just cave-in and return any
monies to the buyer/user on even the smallest issues and with almost no
recourse to you or consideration of whether it is the right thing to do in the
situation. To PayPal, it is about numbers and money and basically it is
cheaper and in their interest for them to hand back money (your money,
remember, not theirs) to buyers almost without any seller considerations than
fight issues, whereas a merchant account has more legislation and obligation
to protect you and will infact dispute chargebacks and other complaints if you
so request. Also, unlike PayPal, they will not freeze your account or make
other major demands that could affect your business, when customer related
issues do occur (and eventually one will occur!).

~~~
andrewf
Paypal has a load of services for billing credit cards and sending money to a
merchant account; they purchased Verisign's online payments business a while
back. Presumably that's what's being discussed here.

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JeffL
I offer both options for setting up monthly subscriptions and people go almost
exactly 50/50 between the two. Some people prefer Pay Pal because they feel
more secure while others refuse to use Pay Pal for whatever reasons.

Setting up a payment system isn't really that difficult. It seems like if you
get even 1% more sign ups because you offer both choices, you should hopefully
make out on the extra implementation cost.

~~~
matt1
Thanks, good points. It is possible though that you wouldn't experience a
significant drop if you offered one or the other. Since you offer both, people
probably choose whichever is most convenient, but it doesn't mean that you'd
lose half your customers.

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daveambrose
Have you looked into PayPal Pro? [https://www.paypal.com/us/cgi-
bin/webscr?cmd=_wp-pro-overvie...](https://www.paypal.com/us/cgi-
bin/webscr?cmd=_wp-pro-overview-outside) and [https://cms.paypal.com/cgi-
bin/marketingweb?cmd=_render-cont...](https://cms.paypal.com/cgi-
bin/marketingweb?cmd=_render-
content&content_ID=developer/solutions_carts_wp_pro)

There are a few options you can take, ranging from creating a Google Checkout
account, PayPal account or even going as far as a merchant account (where your
site is processing a very large amount of transactions a month). Some say
PayPal is more buyer-centric and others say Google Checkout is more seller-
centric.

One thing to consider with PayPal (either Pro or Express Checkout), you need
to build into your design and flow the way the customer will purchase the
product, enter the product into the shopping cart and then do one of two
things:

1\. If using PayPal pro, continue the transaction all on your site and then
return to the product summary/confirmation page. 2\. If using Express
Checkout, leave your site to PayPal and then return to the product
summary/confirmation page.

Here's some more information on PayPal Pro, API and integration design:
[https://www.paypalobjects.com/WEBSCR-550-20081103-1/en_US/pd...](https://www.paypalobjects.com/WEBSCR-550-20081103-1/en_US/pdf/PP_WebsitePaymentsPro_IntegrationGuide.pdf)

What are you building?

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nreece
We use PayPal for our service (Feedity.com). It works well. But once in a
while we have users who simply do not want to pay through PayPal (due to
security/privacy issues, or they don't have a credit card). In such cases we
generally recommend them to pay with an eCheck. We have perfectly good
potential customers waiting for us to provide an alternate payment method. It
doesn't happen too often, but at the end of the day, every new customer
counts.

Another thing we have learned is that you should always offer monthly as well
as annual subscriptions. We'll be introducing monthly subscriptions (through
PayPal) pretty soon.

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m_eiman
You should look at PCI DSS, the new requirements for processing credit card
purchases. I haven't looked into it very deeply, but according to the
reporting about it you'll no longer be able to use a simple form on your own
site to handle credit cards - you'll have to go through an external payment
processing site (or implement it yourself and have it audited - expensive!).

Compliance with these new rules will be mandatory beginning next year.

More info at <https://www.pcisecuritystandards.org/>

~~~
andrewf
AFAIK, if you're not doing loads (well into six figures) of transactions, you
don't _need_ to get external auditors in. But there's a lot of work in
figuring out what is required, and the penalties for screwing up are severe,
so you may want to anyway.

~~~
m_eiman
This is what they have to say about this:

"""How do I determine whether my business would be required to do a full
independent assessment or a self assessment?

Merchants that store payment account data should contact the acquiring
financial institutions with whom they have merchant agreements to determine
whether they must validate compliance and the specific requirements for
compliance validation. Service providers should contact the individual payment
brands for further information. """

Wonderful example of saying "we're not saying until you're paying" in as words
as possible.

~~~
andrewf
Most banks will have a standard policy, and you should be able to dig it out
of their sales guys.

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vaksel
I think for your audience using paypal will kinda label you amateurish.

~~~
matt1
I'm not so sure. Would you consider a site amateurish if they exclusively
offered Paypal for payments?

~~~
sjs382
Right or wrong, yes I would.

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subpixel
PayPal is a good alternative checkout method, but less desirable as a billing
method. Recurring billing via PayPal, for example, requires your customer to
enter a hairy "User Agreement" giving you permission to charge them up to
several hundred dollars/mo. Try using PayPal at GoDaddy to see what I'm
referring to.

~~~
andrewf
I don't know where you're getting several hundred dollars/mo from. Customers
obviously need to consent to the recurring billing upfront, but I'm not aware
of requirements more onerous than those imposed by the credit card companies.

