Help me find an easy way to process credit cards automatically online.

January 13, 2007 8:51 PM

Whats the easiest and most cost effective way to process credit cards online for a web service?

Although it's very "web 1", I'm setting up a subscription based web service that would bill users automatically on a monthly basis. Is there a company or service out there that makes this easy? One that won't cost me an arm and a leg? I've already set up a business bank account and all that. My first thought was to just use Paypal but I'm not sure if they offer an automatic solution. Any advice?

posted by Geoffh to computers & internet (10 comments total)

I just went to my local bank and opened up a merchant account. It was very easy and costs me $40/month. Then I set up a Yahoo store for another $40/month.
posted by Ostara at 9:10 PM on January 13, 2007

Paypal does allow you to have users subscribe and it will auto-bill them monthly for you.
posted by IndigoRain at 9:51 PM on January 13, 2007

Merchant accounts are the way to go here, unless you are a non-profit. The only issue with merchant accounts are the fees. You may be charged a rate for each CC transaction (usually 2% but sometimes higher). Search around and see if banks will offer a grace period or a minimum balance that will allow you to skirt CC processing fees.
posted by parmanparman at 6:01 AM on January 14, 2007

If you belong to Costco, they have a very cost effective credtit card processing solution whose rates were lower than anyone else we could find.
posted by Lame_username at 7:04 AM on January 14, 2007

For low-volume stuff, Paypal was cheaper than any of the other processors I've looked at.
posted by sonofslim at 7:21 AM on January 14, 2007

I've set up credit card processing for two web sites, including all the research, phone calls, emails, coordinating testing between custom-built shopping carts and credit company gateways, etc.

IndigoRain and sonofslim are correct. For an easy initial setup with low-volume and standardized fees, go with PayPal. Take a look at their Standard option. Your users don't need a PayPal account.

If you'd rather go with a traditional processor (or your site really takes off) you should consider Paymentech. They're a part of Chase. They were the easiest company to work with for me.

Getting set up does require a bit of paperwork, but you get set up with merchant accounts for Visa/MC, American Express, and Discover, the lowest gateway fees and interchange rates I was able to find with anyone, excellent customer service and technical support, and excellent security.
posted by Captaintripps at 8:30 AM on January 14, 2007

one thing to watch out for when comparing providers is the transaction fees. There is usually a percentage, but also a flat fee. I found one company that charged $0.45 — but the catch was this fee was for every transaction, successful or not!

So, if someone entered in their credit card number wrong, that would cost $0.45. And since each transaction is actually a PREAUTH and then a POSTAUTH, the actual cost was $0.90. Watch out for that. And watch out for long contracts where you are locked into paying your monthly fees long after you cancel or move to another provider.

Paypal is excellent until you have more than 500-1000 transactions a month. (the exact number depends of course on the price of your service.)
posted by kamelhoecker at 8:57 AM on January 14, 2007

Re: Paypal: PayPal Sucks.
posted by SpecialK at 9:31 AM on January 14, 2007

I've had good luck with PayPal. I've been using it for the past 3 years with no problems.

SpecialK: Practically every large company has a hissyfit website dedicated to badmouthing it.
posted by jesirose at 10:46 PM on January 14, 2007

It's true, paypal can suck. You might get weird unhelpful error messages. You might get your account stuck in limbo due to fraud or registration problems. It might take 20 seconds for the paypal page to load. Generally, however it works. And now that Google is getting into the payment game, Paypal will actually have to act a little more grown-up. e.g. Their specs/parameters still change without warning, but at least they document them now!
posted by kamelhoecker at 5:58 PM on January 16, 2007