Ask HN: Bootstrapping and accepting payments

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.

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.

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.

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!

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.

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.

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.

Have you looked at CheddarGetter?

http://support.cheddargetter.com/discussions/questions/271-c... 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).

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

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

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.

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