

Ask HN: Bootstrapping and accepting payments - imechura

All,<p>I am working on a SAAS project that will be serving small businesses (5-50 employee). I do not want to go the funding route until I have some paying customers and a few product iterations.<p>I am pretty sure that I will eventually go with braintree for payment processing but I would like to avoid a monthly fee during the first 4 months while I focus on customer acquisition. since this is bootstrapped from my own wallet I would rather spend that money on marketing and customer acquisition.<p>What would you suggest as an alternative to braintree for the short term?<p>I know paypal is out there but posts on this board have scared me away from that option.  But maybe I should consider them.<p>Also, do you think customers would be turned off by a manual monthly invoicing via email in the short term? If I where to go this route I would probably allow the first 30 days for free then invoice them for the following month. I would expect that the volume would be pretty low in the first few months so the labor involved may not be a deal breaker.<p>The manual process would spare me from developing an integrated payment system that would ultimately be replaced.<p>What are your thought?<p>Thanks,
Ian
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rakkhi
Ian, I know that Paypay has a poor reputation for being buyer centric but they
have 14% of the global market (<http://buswk.co/eN1mCa>) so they are doing
something right. I deployed Paypal for my SAAS
(<http://www.simplesecurityra.com>) and it was really simple to setup. I
wanted to do a subscription based service with automatic billing and it works
really well. I have quite a few users now and have never had a problem. I
would agree that having a monthly subscription is lot likely to mean you get a
lot less re-evaluating the service. I mean it works for gym's and cable TV so
why not you?

There are no monthly fees and the transaction fees are not that bad (GBP for
me):

Purchase payments received (monthly) Fee per transaction

£0.00 GBP - £1,500.00 GBP 3.4% + £0.20 GBP

£1,500.01 GBP - £6,000.00 GBP 2.9% + £0.20 GBP

£6,000.01 GBP - £15,000.00 GBP 2.4% + £0.20 GBP

£15,000.01 GBP - £55,000.00 GBP 1.9% + £0.20 GBP

above £55,000.00 GBP* 1.4% + £0.20 GBP

You could also consider Google checkout and Amazon checkout but I think Paypal
is the best of these choices.

~~~
ianpurton
I also use Paypal for my SaaS applicationm (<http://servermonitoringhq.com>).
I run a free trial so I'm not asking for payment upfront. Only when the
customer decides to signup do they see the paypal subscription button.

My target market is quite paypal savvy so it turns into quite an easy way to
pay. i.e. You just enter you username, password. From what I've seen all the
current solutions for gathering monthly payments require a merchant account.

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imechura
One other option I have been considering is a manual process using
FreshBooks.com. Using the subscription services, I would just have to add the
new customers when they joined and remove them when they canceled. It appears
from the documentation that it will send an invoice and automatically charge
the customers credit card.

From the freshbooks website...

Overview

Managing subscriptions to FreshBooks centers around creating recurring
profiles. The same functionality available in the web application found on the
Invoice tab under the Recurring subtab is available through the FreshBooks
API.

FreshBooks recurring profiles create and send invoices automatically for you
so you don’t have to manage them yourself. FreshBooks recurring profiles do
some interesting tricks:

    
    
        * Automatically send recurring invoices monthly, yearly, or as little or often as you would like.
        * Automatically charge your client’s credit card whenever you generate an invoice.
        * Rack up charges. Add or remove line items from a subscription at any time.
        * Send invoices by email or through the post.

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rysmit
Ian, Braintree is inexpensive, I would recommend you bite the bullet and
integrate with them from the start. If a customer is willing to invest their
data with you or rely on your services then you should reciprocate and show
your dedication by paying the monthly fee + transactions. Set it up and then
focus on covering those costs by acquiring customers.

Good luck!

~~~
bdclimber14
I don't consider Braintree to be inexpensive at all. But that's subjective, so
let's get the facts out there. The monthly minimum I had to pay (minimum of
fees) was $100, plus a $75 monthly fee. This is pretty expensive to me.

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PonyGumbo
Manual billing definitely has some drawbacks. My SaaS customers are split
between those on automatic billing and those who log in every month to pay. Be
aware that people on manual billing (in my experience, anyway) tend to treat
it like the cable bill - something they feel have a couple of weeks to pay.
They never seem to catch up, either (e.g. 'I just paid that two weeks ago',
oblivious to the fact they were two weeks late). And if you hammer them with
billing reminders, they tend to tune out, and eventually miss that inevitable
termination notice. I've had so many customers on manual billing passively
cancel over the years (i.e. stop paying, not respond to emails) and then
reappear out of the ether months later that I now wait at least six months to
completely wipe their account data.

Manual billing also forces customers to consciously reevaluate whether it's
worth paying for your service every time they log in to pay a bill.

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thecoffman
I've run into this same issue - trying to hack on a side project to accept
payments and I don't have $100's / month to pay fees on a real payment
processor like braintree or authorize.net - nor do I want to bother with a
merchant account for a project I'm spending an hour or two a week on. You can
go with Paypal or Google Checkout but both seem less-than-professional in my
opinion. You're kind of stuck between a rock and a hard place.

What I'd love to see is something like Square - but for online payments. I can
link square to my normal bank account, there's no monthly fee, no merchant
account to deal with, etc - just a per transaction fee.

Online payments are a nightmare for a small bootstrapped side project, and in
least in my research there's no good solution.

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crasshopper
Have you looked at CheddarGetter?

[http://support.cheddargetter.com/discussions/questions/271-c...](http://support.cheddargetter.com/discussions/questions/271-cheddar-
gateway) CheddarGateway is $20/month and $0.15 per transaction

I haven't used it, just know the developers. Price point sounds in your range
(maybe).

~~~
imechura
I don't see the option you mentioned on their site. From the pricing plans it
looks to be the same price as braintree

~~~
crasshopper
Comment #4 by Jonathon on July 22 '10. This is the Cheddar Gateway.

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noodle
i hate it, but i've gone with paypal and spreedly, as suggested by patio11.

i hate the fact that i need to use it, but its wasted time, resources and
effort for me to wring my hands at the situation and wish that i had an invite
to stripe (<http://stripe.com>), to hunt down a processor that will accept my
low volume (i was rejected from several due to volume), or to buy into a more
expensive situation that costs more than my estimated revenue.

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whichdan
Have you looked into Amazon FPS? I'm in a similar position, and considering
them as an alternative to PayPal.

