Choosing Recurring or Subscription-based Credit Card Payments

Sun, Mar 21, 2010

I've been spending a few evenings researching the best way to integrate subscription-based payments for my new SaaS project. I was curious if there were any new start-ups implementing a web-based applications for recurring or subscription payments, so I posted a question on Hacker News. I got some really good answers and pointers, which I wanted to share.

Web-based subscription payment services

The biggest contenders in the Web-Apps-for-subscription-payments category are: I'm not even going to talk through the differences between them, because they basically all offer the same thing with different names and prices. They offer branded payment pages, a nice interface for managing different types of subscriptions, APIs, etc. Damon Cortesi wrote a much better comparison between the different services, so I recommend that you read that article if you need advice.

None of them charge too much for their services and the charges are not percentage fees, most of the time, which is good news since the payment gateways are charging a lot there and you really can't afford to let such a big part of your income go to transaction fees.

You need to be aware that you will still need a separate payment gateway, and therefore a merchant account, to use those services.

I'm really interested in going for Chargify because of the prices and the recommendations on HN. Their website is slick, they've got a video demonstration of the product, their price seems to be less expensive than the other options. Currently they only offer as a payment gateway, but I'm hoping that list of choices will expand with time.

Merchant Accounts

Another issue that a lot of people want to point out is the issue of how much of a hassle it is to set up merchant accounts. Daniel Tenner wrote an excellent article on merchant accounts, which you should read if you haven't already. This was posted on HN back when he wrote it and there are also some helpful comments there.

Other services

Currently Paypal also offers recurring payments through their gateway and Google has a similar thing in their Beta version of Google Checkout.