

Ask HN: I've built a product - how do I take payments in the UK? - tcarnell

	I am based in the UK and I have built a web application and now I want to charge people for a 'premium' account.
I guess I have the following basic options:<p>1. Use an API from a bank and handle the payment processing myself (which one?)<p>2. Use a 3rd party payment system and don't have anything to do with the actual processing<p>3. Use PayPal<p>Does anybody have any experience (pros/cons) with these approaches? Any help would be REALLY appreciated (of course, I will research this myself and also publish my own findings).
======
pierrefar
There are MANY consideration in addition to the technolgy:

1\. You'll get killed with currency conversions with PayPal. They're the
equivalent of thieves in this regard. If you're expecting lots of non-GBP
income, this could become a significant cost of running the business. But
they're very convenient and easy to link to UK bank accounts.

2\. Don't get married to one provider. Use a "meta" API like Spreedly
(<http://spreedly.com/> ) so that you can quickly/easily switch if something
goes wrong. With all the "PayPayl is evil" stories of late, this is simply
prudent. I haven't used Spreedly yet, but heard good things about them, and
they answered a quick question I recently asked them.

3\. Google Checkout is not as well-known as PayPal. Funny anecdote I can't
find the reference for now: A website was using PayPal and thought to add
Checkout, with both icons next to each other on the page. Their _Paypal_
earnings shot up significantly, and Checkout got very little additional
revenue.

4\. If you accept credit cards for payment, ne careful with PCI compliance,
even if you don't accept credit cards on your own servers:
[http://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Secu...](http://en.wikipedia.org/wiki/Payment_Card_Industry_Data_Security_Standard)
. If you process the CC info yourself, PCI compliance can be very expensive
for a sole hacker or small business, so consider off-loading the processing to
a provider. You'll still need to have some level of compliance as I understand
it, but it's easier. IANAL so get proper advice from your lawyer and
accountant type friends.

5\. Taxes and HMRC. 'nuff said.

~~~
Jim_Neath
+1 for Spreedly. I'm going to be using it along with Paypal Payments Pro UK.
Then later down the line I plan to swap out Paypal with someone more reliable,
eg. Sagepay.

~~~
pierrefar
Would love to read about your experience when you go to production with
Spreedly.

~~~
Jim_Neath
I'll make sure I post something once I get round to launching :)

------
swombat
A couple of articles that might help you:

[http://danieltenner.com/posts/0006-how-to-get-a-merchant-
acc...](http://danieltenner.com/posts/0006-how-to-get-a-merchant-account.html)

[http://blog.boxedice.com/2009/05/20/taking-payments-
online-m...](http://blog.boxedice.com/2009/05/20/taking-payments-online-
merchant-account-payment-processor-fees/)

------
oscardelben
I have the same problem but I'm based on Italy. Banks can be really expensive
but paypal is too evil for me to even consider it. If you've been here for
more than two weeks you've seen how many horror stories about paypal are
published.

I'm considering google checkout and I'm wondering if anyone has experience
with them.

UPDATE: based on another response, I learned that google checkout is available
only for USA and UK customers? That makes it pretty unusable in my opinion.
Are there similar services?

~~~
andrew1
> paypal is too evil for me to even consider it

I've never used PayPal (other than as a purchaser) so don't know what they're
like to use for the average seller, but that statement seems a little strong.
I imagine it's very much the case that the few percentage of people who have a
bad experience make up a far larger percentage of the people writing blog
posts about PayPal. So it might be that 2% of people have bad experiences with
PayPal, and 80% of them write it up on their blogs, while 98% of people
haven't had any problems with PayPal but only 1% of them write about their
great experience. So something like 60% of the things you read about PayPal
will be negative.

All those figures are pure speculation, and PayPal may be absolutely terrible
to work with, but I think it's worth bearing in mind.

~~~
oscardelben
I've used them for selling physical products. With that I had no problems,
because they could track the process, but I had to fax a lot of papers to
them.

The problem is when you are selling non physical products, that's a different
story because they can't guarantee security.

What is evil to me is that once you are blocked, they can't do nothing. A
common point I hear from people who have problems with paypal is that although
they have sent fax and spoken with real people, they can't re-abilitate their
account. Another scaring thing is that most times (this is very common through
ebay sellers, which I was one) is that they can keep your money! So imagine
that you go live today and you sell 100 copies of your product for 30$ cad,
and your account gets blocked and they keep your 3,000$, that's the reason I'd
like to avoid dealing with them in the first place.

------
forkqueue
I'm based in the UK, and we use HSBC for payment processing on
<http://kutoken.com/>

The API documentation is a bit frustrating, but the service itself is good and
gives you the option of recurring payments. We can also accept payments in
multiple currencies, which a lot of customers appreciate - if you bill people
in GBP but they have a dollar card, how much they actually pay is an unknown.

------
bensummers
Check out merchant gateway products. You can start with something where they
process payments on your behalf and then graduate to getting your own merchant
account. (Join the FSB to get a good deal at Natwest Streamline.)

We use <http://www.paypoint.net/>

------
milestinsley
I use <http://www.fastspring.com/>. I too am UK based and this solution works
nicely. They're US-based, but it means anyone with a credit card (US, UK or
whatever) can pay for your software and FastSpring just wire the earnings to
your UK account.

I find this to be a far better experience than PayPal, Google Checkout and
some of the others. They have great support and a really nice, intuitive
backend admin interface. I think their fee (which can be 5.9%+$0.95 or 8.9%
flat) is well worth it.

It's certainly a good starting point, even if you then build a custom solution
later.

Good luck with your venture.

EDIT: Spelling :P

------
cperciva
For Tarsnap, I just use PayPal; I don't like it, but they're better than the
alternatives.

Since you're in the UK, I'd recommend looking into Google Checkout -- I
understand it's available in the US and UK, albeit not the rest of the world.
Then you can offer your customers a choice.

EDIT: I'm also looking forward to using Amazon Payments -- so far it's US-
only, but I'm sure they'll be expanding to the rest of the world any decade
now...

~~~
tcarnell
Thanks! That's a great idea - Google Checkout completely skipped my mind -
I'll look into that.

~~~
andyking
I don't have a credit card, only a Maestro (used to be Switch) card. Google
Checkout stopped accepting these a few months ago.

------
sharpn
I've had no problems with paypal, selling mostly in the UK; I charge £12.50 &
get £11.87 from them. Overseas customers see whatever the paypal converted
cost is in their currency. But if you're taking recurring payments (say
monthly) then definitely look into setting up direct debits - zero or tiny
transaction costs. The downside of this is that you'll have to get signed
paper mandates until your bank sponsors you to automate this.

------
didroe
We use <http://www.sagepay.co.uk>

You get the choice of using their servers to handle card details and
processing, or you can do it yourself and hand the numbers off to them using
an API. They were recommended by RBS.

------
jot
If your turnover exceeds or is expected to exceed £68,000 you'll need to be
VAT registered. This means you'll need to charge VAT on all sales to customers
in the EU and deal with loads more paperwork.

This makes taking payments in the EU even more complicated.

~~~
jdietrich
One slight correction - £68,000 of sales within the EU. Any sales outside the
EU are VAT exempt and so do not count towards the threshold. If your marketing
efforts are focused on the US you can help postpone the requirement to
register for VAT.

For most web-based startups, VAT accounting should be relatively trivial.

------
awa
As a buyer mostly, I would recommend having paypal/google checkout along with
an alternate method so your site is still usable if paypal blocks you or goes
down... I don't feel safe while handing out my credit/bank details to a new
website.

~~~
tcarnell
yes, this is a good point - I dont want to risk a low conversion rate because
users don't have confidence in my payment system.

~~~
patio11
Your mileage may vary, but I think that in many niches the portion of users
you have who refuse to use Paypal/GC is small enough that spending engineering
resources to integrate more payment options is not profit-maximizing compared
to spending the same resources to just get more users.

Anecdote: in three years I've had six inquiries about alternate payment
methods and _all_ of them were because "I don't or can't pay online".

~~~
cperciva
_Anecdote: in three years I've had six inquiries about alternate payment
methods and all of them were because "I don't or can't pay online"._

For Tarsnap, I've had all of four people say that they didn't want to use
PayPal -- and of those, two ended up using it anyway, and one had a friend
make a payment for him. Of course, I have no idea how many customers I'm
losing who never complain.

------
neiljohnson
Depending on your product, have you considered taking payment from the
purchaser's mobile phone (even if it's just an alternative payment route),
that way people without Paypal can still make a payment without having to
leave your site while they sign up.

<http://www.mxtelecom.com/uk/payforit#about>
<http://www.mxtelecom.com/uk/tech/cta/webpfi>

Just a thought, I work for these guys, so I can't claim to be impartial.

------
patrickmclaren
Check out <http://www.braintreepaymentsolutions.com/> They've been recommended
by quite a few people around here.

------
es
Take a look on 2checkout.com. We are using it for more than a month
already(moved from PayPal to accept customers who can't use PayPal).

------
ciex
Any experiences with Amazon Payments? They look like a viable PayPal
alternative to me as most people already have an Amazon account.

------
Vivtek
Consider Moneybookers, too. They work pretty well within Europe.

~~~
ErrantX
Seconded. Ive never worked with them from the developers side. But as a
consumer I quite like Money bookers.

------
zandorg
Plimus are good.

