Payment Processors

This evening I started to work on the registration process for Chef. There are so many ways to accept payments that it makes my head spin.  A couple months ago I signed up for a RegNow account and they even waived the $20 setup fee for me.  I’ve only recently started setting things up with them, and tonight ran through a Test payment.

It sucked.  Granted, I haven’t customized things, but I’ve got major problems with the things that aren’t customizable.  Most notable:

• The required fields for a customer are retarded.  I don’t think I’ve ever had to enter a phone number to purchase software online before.   RegNow requires it.
• They offer a “feature” to customers for saving their download on their servers for a certain period of time, as some sort of backup.  Ok, that’s fine and dandy – but it’s $6.95 and opt-out!  So Suzy goes to my website and sees that Chef is $35, but as soon as she clicks Buy she’s taken to a page saying the total is $41.95.  That would piss me off.  It pissed me off during my trial run.
• As a part of this software backup, they require me to upload a file to them.  I’ve got a couple issues with this:

• Since Chef is a big download/install, I paid for webhosting to get good transfer speeds.  From what I hear, RegNow’s servers are pretty slow.  That’s not an impression I want to leave on people.
• As a part of the order-complete email that is sent to the customer, they include a link to this file for them to download.  Since I’m providing the key to the user in this email (or a subsequent one), this is just plain confusing.  Not to mention the url seems to be a couple hundred characters long and looks unsightly.

So now I think I’m back at square one, looking for a way to take payments.  The options are

• Opening a merchant account and using one of the many direct credit card processors.
• Using a service tailored toward software publishers (RegNow, SWReg, DigiBuy, etc.)
• Using a more general ecommerce solution like Google Checkout or PayPal.

Merchant account/cc processor route

This route would be nice, but it has the highest startup costs of all three options.  Opening the merchant account has a high up-front fee, as does the credit card processor.  In addition, I think I’ve seen that both of these often have monthly fees associated with them.  Ontop of that, it requires an official business to be setup before opening the merchant account.  I want to do an LLC, but that’s another $500 here in Illinois.

Going this route would mean I’m hosting the solution, which will require an ssl certificate and an upgrade to my webhosting plan.
That’s just too expensive without knowing if anyone’s even going to want Chef.

Software publisher eCommerce route

There are so many of these companies out there, each with a slightly different deal and capabilities.  Setup fees tend to be minimal ($10-$20) and monthly fees are almost non-existent, but the per-transaction fees can get quite expensive and very between services by a wide margin.  I’ve seen 3%-14%, and some also charge an additional buck or two per transaction.

My gut tells me this may be the best route for me though, as they shield a lot of the dirty work (chargebacks, fraud, etc).  That can’t be underestimated I suppose.  Plus, I really don’t mind giving up a few bucks per transaction since there aren’t any recurring fees.

My main issue is that it feels like it’s going to take a lot of time and trial and error before I find the best one to go with.  And in the back of my mind I know that I could get one of the 3rd options going in next to no time.

Google Checkout or PayPal route

These are very temping.  They offer cheap setup, cheap transaction fees, and quick-to-implement APIs.  I have a couple fears with these that are holding me back:

• Google Checkout

• They’re a bit new to the payment processing game.  It is google, I know, but what percentage of people out there have actually used it?  Will that prevent people from buying?
• It’s google, and I’ve become more and more cautious towards them over the past couple years.

• Reputation.  I’ve read several posts from other people selling software and having problems with PayPal in the area of customer service and the handling of chargeback situations.  I don’t want to get into a situation where my PayPal account is locked due to a complaint and I cannot get it unlocked for a period of time.

So that’s it.  Those seem to be my options and how I feel about the different ones.  I’m sure nobody is reading this far, so I can probably type whatever the hell I want right here…  Anyway, at least typing those things out helped me really think about what’s involved.  Thoughts anyone?  Oh, that’s right, nobody made it this far.