Choosing credit card payment solution

I'll be selling software over the web. Download it, try it, pay for it. You get the idea.

I'm currently starting to evaluate payment solutions.

I have dug up the following services:

www.clickbank.com/
www.esellerate.net/
www.paysystems.com/
www.smallbusiness.yahoo.com/promo/ms_simple.php
www.paypal.com/
www.merchantexpress.com/
www.lynksystems.com/
www.2checkout.com/
www.bidpay.com/
www.worldpay.com/
www.ecount.com/
www.auctionpayments.checkfree.com/
www.payingfast.com/
www.propay.com/
www.stormpay.com/
www.yaga.com/
www.bitpass.com/
www.pico-pay.com/
www.peppercoin.com/
www.firstgate.com/
www.paystone.com/
www.cashedge.com/
www.paydirect.yahoo.com/
www.amazon.com/honor/

www.regnow.com/
www.regsoft.com/
www.softwrap.com/
www.swreg.org/
www.shareit.com/
www.sellshareware.com/
www.setsystems.com/
www.digitalriver.com/

If you have any experience with any of the above, good or bad (especially, bad experiences), please let me know. Also, if you are using something else, please let me know.

I don't really want to default to Paypal, their fees are pretty high, and I don't want to force my customers to sign up for their service. Also, not sure if I should just use my current bank for this, not sure of their fees, or ability to integrate with my site.

Thanks much.... All responses highly appreciated.

smallbizman
Monday, November 03, 2003

I had the same reservations about PayPal, but in practice only a tiny amount of customers refuse to sign up with PayPal when buying.

Matthew Lock
Monday, November 03, 2003

Did a traceroute to Joel's purchase page. Looks like he's using Verisign for Fog Creek's payment processing and secure hosting. Anybody have any experience with them? The one thing I'd be able to count on with them is top notch security for my customers' credit card info, but what are their fees like?

smallbizman
Monday, November 03, 2003

Ahem, we are not using Verisign for ANYTHING. Can't stand them.

We do, however, have a policy of not giving out ANY information about our credit card processing infrastructure... why make it easy for hackers?

Joel Spolsky
Monday, November 03, 2003

"Ahem, we are not using Verisign for ANYTHING. Can't stand them."

Good to know. I guess I can cross them off the list

I don't really care what you use now, but if you have any experiences/stories about the one's listed in the original post, it would be good to know. Thanks.

smallbizman
Monday, November 03, 2003

I and some others I know use esellerate. Some of my friends even make a living off of it.

Pros: They do a good job. System & money's reliable. The libraries provided let you sell the app within the app, with secure credit card transactions and all.

Cons: Asking for more functionality will get you an RSN answer, but the additional functionality doesn't come.

Overall, I recommend it.

H. Lally Singh
Monday, November 03, 2003

"I and some others I know use esellerate. Some of my friends even make a living off of it."

Just did a review of their site. They look quite professional, but their fees are very steep (10-15% of sale price). Their contract has a lot of crazy intellectual property clauses about their so-called "know how". And I don't really need to integrate their code into mine. I already have my own registration code algorithm working, probably not as good as theirs, but it'll stop 99% of casual piracy. The other 1% I don't care about, those guys will never buy it anyway.

What I need is a secure web based processing solution, and I think 10-15% transaction fees are kind of steep to pay for that. But thanks for the recommendation any way.

smallbizman
Monday, November 03, 2003

I have a friend who runs an online store. He used to only offer Paypal, but noticed that a LOT of clickthrough paths stopped at the first Paypal page.

When he added credit cards, sales increased dramatically immediately

Philo

Philo
Monday, November 03, 2003

Speaking as a consumer, I'll never buy anything that requires me to sign up to a service such as paypal.


Monday, November 03, 2003

(hint!) Why don't you just get a normal merchant account? The fee should be under 3%.

Joel Spolsky
Monday, November 03, 2003

From experience, don't start off on a merchant account. It's a lot of overhead, and you'll have you hands full as it is.

I'd recommend esellerate. Low starting rate (10%), and easy to get started. Never had a problem with billing, etc.

NC
Monday, November 03, 2003

Just re-read some of the comments. If you can find a well-established company offering full services for less than 10%, can you post it?

Not including SWREG please

NC
Monday, November 03, 2003

We use RegSoft for Awasu and they've been pretty good (albeit a little expensive). We originally went with Kagi but their support was so woeful we switched.

Taka
Tuesday, November 04, 2003

Doesn't a normal merchant account mean you will have to write some secure code to be able to allow people to enter credit card details using your website?

I am also very curious about this discussion, as I am myself researching the very same questions. How to I get the money from the customers?

Doesn't PayPal offer the ability to recieve credit car payments from customers? I assumed that this meant they did not have to have a PayPal account? Am I incorrect?

Aussie Chick
Tuesday, November 04, 2003

smallbizmann: OT but I would love to ask some Q's about your reg. process. I am in the middle of developing something myself and am trying to figure out what exactly is the best method, would love to hear some thoughts. You don't have an email link...

Aussie Chick
Tuesday, November 04, 2003

I've used Register Now for over three years now. They're OK and reliable, but they charge 20%, which is about as high as it gets.

I was thinking of switching to SWREG, but is this a bad idea?

Frederik Slijkerman
Tuesday, November 04, 2003

AussieChick writes: "OT but I would love to ask some Q's about your reg. process. I am in the middle of developing something myself and am trying to figure out what exactly is the best method, would love to hear some thoughts. You don't have an email link..."

Nothing fancy, I wrote custom hashing algorithm that takes the customer number and generates a unique 12 hex digit code, similar to what you would see on a MS Windows CD Key type registration. The idea is:

1. Person dowloads software.
2. Person can use software for X number of days before registering.
3. Person goes to web site, makes a purchase, my CGI script generates a registration code based on their customer number and e-mails it to them.
4. They enter the code into the program, it saves it to disk, and everything is peachy.

If a code ever gets posted to the Internet or Usenet, I can easily reverse-hash it, get the customer number, and track it back to the original purchase purchase.

I don't see why I should pay someone 15-30% of my gross for something so simple. Granted, like I said, it may not be as secure as their solutions, but if I stop 99% of casual piracy, that's fine by me because the other 1% (for instance, serious pirates who dwell on sites like astalavista.com and post cracks) don't buy software anyway. I'm not going to expend insane effort or give up a huge percentage of revenue to stop them because those guys can't be stopped (they disassemble x86 code and understand it easier than we can tie our shoes).

Now, obviously, serial numbers from fraudulent purchases will eventually be posted to pirate web sites. It happens to every program. The solution to this is to change the hashing algorithm in newer versions of the software and e-mailing newly generated codes to registered customers who are doing upgrades to the next version. But beyond this, there is no point in making extreme effort to try to stop these 1%'ers, since they will never pay for software, as a matter idiology.

smallbizman
Tuesday, November 04, 2003

I like the ability to do bank transfers. I trust my banks internetbank and I can always turn to a person, face to face at the local office if there is a problem.

And the internetbank is only one homepage away once I have placed an order and gotten the ordernr. Theoretically.. not many places have this as an option.
I do not care if the order is not carried out until the transfer has been verified.

I am not sure how this works in the US, between banks with costs etc.
Here in Europe there is a problem with costs between countries.
To move your monney to an account in another bank does not cost anything. (Well the bank "keeps" your monney for 2-3 days while transfering so they gain the rent.. )

Am I missing some buissness end NONO about this ?
Hard to handle ?
I believe that the dot-com boom would have gotten more customers if they would have provided an old-fashion way to do payments.
Putting my creditcard online is something I seldom do.

see also.. for a related comment on a similar subject
kuro5hin

Fredrik Svensson
Tuesday, November 04, 2003

Joel wrote: "(hint!) Why don't you just get a normal merchant account? The fee should be under 3%. "

I probably will. I'll call Fleet later in the week to inquire. I am just concerned that it will be hard to integrate with my site. I guess I'll need my own SSL (and the added headache of actually keeping CC data on my server, which I don't want to do for security reasons) or force people to got to the bank's ugly payment page. The last thing I want to do is have to enter the transactions into the bank's software manually.

I should mention that my goal is to be selling $15-$25 pieces of software on my site in a almost 100% automated fashion. No shipping of physical media and no manual processing of card info. If I was selling a $299 product that required sending out physical items, then it would be worth processing things by hand and perhaps hiring people to do this, but at this stage, that is not my goal. In summary, my ideal business model is digital marketing, digital distribution, digital payments, all almost 100% automated. Also, I'd like to keep control of the registration process and registration codes so that some third party can't screw me over by selling more copies of my software than I actually know about.

smallbizman
Tuesday, November 04, 2003

The problem with a merchant account is that banks typically require a deposit for new businesses to protect the card issuers against fraud.

So, want to take MasterCard? Fine, open an account with BMO and deposit $5000. Visa or Amex? Open an account with Royal Bank or Amex Bank and deposit another $5000 into each.

$15K later, you're all set. So, how many shareware registrations will you need just to get your deposits back?

David Jones
Tuesday, November 04, 2003

For the sake of further completeness of my earlier list, and for those collecting the links for future reference, I just dug up one more (this one from InfoSpace):

www.authorizenet.com

I'm thinking I'll have to evaluate all of these one by one, create some sort of matrix, then make a decision. In any case I'll also get a PayPal account just as a backup.

Still looking for more suggestions/reviews/stories. Thanks.

smallbizman
Tuesday, November 04, 2003

Ooohhh...you wanted a matrix!

www.regshare.com

NC
Tuesday, November 04, 2003

FWIW, I've used RegNow, RegSoft, and Kagi for years now, and never had a problem with any of them.

Grumpy Old-Timer
Tuesday, November 04, 2003

Here's a link to another "matrix", this time a fee matrix for sales of different amounts from different vendors. This one is prepared by SWReg; I'm curious why I get the impression some people are recommending against using SWReg:

www.swreg.org/pages/compare.htm

Herbert Sitz
Tuesday, November 04, 2003

For those still interested...

Well, I still haven't come to a final decision, but I have gone through about 30 options, and based on my findings so far, in terms of rates, service, flexibility, professionalism, the following SEEM TO BE (I haven't signed up to any of them yet) the top choices, listed by rating (according to me):

Pure CC processing (rates range from 2.3% to 5%):

1. authorizenet.com
2. paysystems.com
3. 2checkout.com
4. paypal.com

Full Services Software Registration + CC processing (rates range from 4% to 20%):

1. swreg.org
2. kagi.com
3. bmtmicro.net
4. regsoft.com
5. regnow.com
6. plimus.com

Hopefully this will help to narrow the search for other people in this thread who may be interested.

smallbizman
Wednesday, November 05, 2003

I think swreg.org sounds the way to go.

thanks everyone for your input.

Aussie Chick
Wednesday, November 05, 2003