Accepting online subscriptions is a mess

Journal entry
December 7, 2006

Payment gateways, merchant accounts, transaction fees, statements, grraaaah, it’s driving me bonkers.

Here’s the deal: I have a client wanting to sell subscriptions for his web application. Nothing fancy, everyone’s doing it. It should be easy finding a payment gateway supporting that, right? I imagine it is once you manage to wrap your brain around the confusion that is payment gateways and merchant accounts.

But then you have to fight the websites of the payment gateway provider to figure out their pricing. Most payment gateway sites suck. They’re confusing and in no way makes it easy for a regular person to figure out what options to pick. They’re a maze of add-ons and options, and rarely makes it easy for regular Eddie the Entrepreneur figuring out what to buy.

Pay in mind that a lot of these payment providers take a fair chunk of a startups cash. Setup fees, monthly fees, statement fees, transaction fees, you name it. It feels like shopping for a cellphone provider.

With all the startups popping up all over the place there has got to be a massive market opportunity for someone who manages to make getting started taking payments dead easy. And if the only fees were a setup fee and a percentage of each transaction, I bet startups would be crawling all over the service.

Until then, we have to settle for the confusing mess that’s online automated recurring payments.

Categories
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Selling out
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Jakob is an independent web application developer who builds awesome stuff for the web. You can hire him to build awesome stuff for you.

Comments and Trackbacks

Michael December 7, 2006

I hear ya - I think I will be in this situation soon so I'm a bit curious. What have you looked at so far and have you settled on something to use for your project?

Andre December 7, 2006

Yes, i feel exactly the same way.
And if you live in Europe, then the problem is much, much worse.
For my application, i've been searching (and haven't found) for a gateway and merchant account provider for several weeks!!
Well, i guess i will have to go with paypal...

Jakob S December 11, 2006

Michael: Good call, I should post something about the choises and decision when we settle on something.

Andre: PayPal isn't necessarily a bad thing. Their APIs seem pretty solid and reliability should be really good. However, they seem very pricey if you want to do API backed recurring transactions.

Maykel R December 26, 2006

Hi Andre, where are you from? A German company I'm working for (www.cubanbooking.com) acquired its merchant account pretty easier with Acceptance (www.acceptance.de) as Merchant Account Provider and Albis (www.albis-zahlungsdienste.de) as gateway... if you are in Germany I think you could try them.

Mentalized January 16, 2007

This is a followup to my previous rant about the state of accepting online subscriptions. A few things happened after my post. Most importantly the client met with a focus group of potential users, and - among other things -...

Read the rest on Mentalized

Mark Herpel January 19, 2007

Have you taken a look at www.clickandbuy.com ?

Mark

Jakob S January 22, 2007

The Click and Buy website is a great example of a website that does not do enough to help the potential customer.

  • When I click "Become a merchant", ultimately I end up at a page instructing me to call them.
  • Their page with information about their fees instruct me to call them.

This is broken.

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