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Author Topic: What are your experiences with payment providers?  (Read 3776 times)
josant
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« on: March 25, 2012, 05:31:51 AM »

I have been setting up accounts with several different payment providers so that I can charge for my .Net licensing solution (part of the NANY challenge for 2012)

So far I have signed up with PayPal (who hasn't), FastSpring, Kagi and Share-It. I have only had time to set things up with PayPal and FastSpring properly so far. These are some of my observations for those two and some initial reflections on Kagi.

PayPal
  • Very clunky tax handling which is not optimal for EU companies. I need to allow my clients to enter a VAT number and have the payment provider figure out what to do. PayPal doesn't seem to support that at all?
  • No tax support at all for subscriptions with PayPal - which basically makes this a no go for EU companies.
  • Possible affiliate support if you do split payments and set everything up yourself, which seems very difficult and error prone...
  • Supports instant payment notifications.
  • Nice clean professional payment user interface for end users, certain modification of the UI (logo etc) are possible.
  • Does not support coupon codes?
  • Does not have application integration (for selling/donating) directly within application, only via links to Paypal.
   

FastSpring
  • Automatic handling of taxes (inlcuding EU vat)
  • Supports subscriptions with taxes.
  • Does not support affiliates as far as I can see other than if you contact them direct to have split payment set up.
  • Supports instant payment notifications.
  • Not such an attractive user interface for end users when they purchase - input elements are too small for data (VAT nr for instance). Not so modern colors... Seems to support advanced modifications of the UI using custom css though.
  • Supports coupon codes and special offers in several different ways.
  • Allows purchase UI to be integrated directly into windows applications

Kagi - I have not set up a full product with Kagi yet but these are some initial observations.
  • Automatic handling of taxes (inlcuding EU vat)
  • Support for affiliates and partner splits also (as far as I can tell)
  • Supports instant payment notifications.
  • Haven't looked at the payment UI yet...
  • Allows purchase UI to be integrated directly into windows applications
About a week after I signed up for Kagi i received a strange email from what appears to be the Vice President of Sales at Kagi someone I had not been in touch with previously. The email simply contained "Are you going to use your Kagi store ?", no preamble, no contact info or name (only in the from field of the email), no indication as to what the objective of the email was. If you have been using Kagi is this indicative of their customer and seller support?

What are your experiences with these and other payment providers? Particularly I would be interested to hear what their customer support is like...
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Carol Haynes
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« Reply #1 on: March 25, 2012, 05:40:30 AM »

Are you using shopping cart software or just a single button?

If you are using a shopping cart system why not use a cart that supports tax rates and coupons, or supports different user gorups - public and business and have a discount on business transactions that reflects the no tax price?
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josant
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« Reply #2 on: March 25, 2012, 09:00:38 AM »

I personally think a shopping cart is an unnecessary step for buying or donating to software. Once someone indicates that they want to offer you money they should be taken to the actual payment step with as few intervening pages/steps as possible. Both Paypal and FastSpring support going directly to a payment page through links, I believe that Kagi and Share-it also offer direct-to-purchase links.
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Renegade
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« Reply #3 on: March 25, 2012, 09:06:01 AM »

Digital River has a huge variety of solutions for software authors. One of them should fit the bill pretty well.

I've used Share-It, RegNow and I forget what else -- they all seemed pretty good.

Avangate is another to check out.

There are many more as well -- Cleverbridge has a client, which is nice. (Or they had a client last I looked.)

Northstar (Northwood?) is a smaller one, but the owner, Jeff, really goes out of his way to help people.

I keep hearing horrible things about Plimus - they seem to go down a lot. But, they're also very popular.

PayPal is one of the most versatile, but you really need to do a LOT of work to get it done right.

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josant
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« Reply #4 on: March 25, 2012, 09:20:44 AM »

After trying to use PayPal as my initial provider, I would probably say that it is so much work that it isn't even worth it... The issue of not handling EU VAT is a major oversight by PayPal unless it's there and I just haven't found the right settings...

Thanks for the additional providers, had a look at a few of them.

Cleverbridge - they don't disclose pricing or allow you to sign-up without contacting a sales rep...

NorthStar solutions - offer self sign-up and a couple of demo pages to get a feel for it.

Plimus - their site looks real nice... Simple pricing structure.
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Carol Haynes
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« Reply #5 on: March 25, 2012, 10:16:17 AM »

Do you issue a receipt for payment? If so another solution would be to issue a VAT receipt to EU businesses and they can claim back the VAT themselves - they do it all the time because many suppliers don't supply pre-tax.
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tomos
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« Reply #6 on: March 25, 2012, 10:47:50 AM »

Do you issue a receipt for payment? If so another solution would be to issue a VAT receipt to EU businesses and they can claim back the VAT themselves - they do it all the time because many suppliers don't supply pre-tax.

but then, IIUC, josant would have to pay the VAT to [not sure who exactly - some government!]
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Carol Haynes
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« Reply #7 on: March 25, 2012, 12:03:57 PM »

To be able to offer this service he would need to be VAT registered too which means regular VAT returns so it can be done that way.

Alternatively put a VAT registration field on the form the purchaser fills at purchase in then apply the ex-VAT price if it is a VAT registered business ?

You can validate the VAT registration manually via: http://ec.europa.eu/taxation_customs/vies/ before dleivering the software or you can automate this before submitting the payment request. See https://www.servage.net/b...dation-of-eu-vat-numbers/ and the full API details at http://isvat.appspot.com/
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mahesh2k
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« Reply #8 on: March 25, 2012, 12:45:43 PM »

CCavenue (If you're from US or India) and Authorize.net can handle paypal and multiple other payment processors inside their gateway solution. I have limited success with Okpay service but it is quite costly for gateway solution to bank withdrawals process.
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wraith808
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« Reply #9 on: March 25, 2012, 01:05:16 PM »

After trying to use PayPal as my initial provider, I would probably say that it is so much work that it isn't even worth it... The issue of not handling EU VAT is a major oversight by PayPal unless it's there and I just haven't found the right settings...

Did you try to contact them?
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mrainey
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« Reply #10 on: March 25, 2012, 01:11:42 PM »

I've used FastSpring for 2+ years now.  When I signed up they offered, at no charge, to customize the payment screen to make it look more like my web pages.  They were also willing to do some free tailoring of the customer notification email.  They have handled all taxes and currency conversions.  Their service has been fast and reliable.

Customer service is responsive and I've never had unpleasant surprises that I could attribute to FastSpring.

There are two pricing plans - one is a straight 8.9%, the other is 5.9% plus ninety five cents.

I like 'em.
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josant
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« Reply #11 on: March 25, 2012, 02:29:42 PM »

@wraith808 - I haven't contacted the directly but I have read several feature requests on the PayPal developer site referring to VAT support and Paypal have responded to some of them with a "we are not currently looking at offering this" kind of answer.

@mrainey - good to hear the you ar satisfied. I am going to look into what is possible with the CSS. It just feels a bit weird that they don't default to a nice looking neutral white (ala PayPal et al) payment page, instead they have a muddy-brown-grey default background.

@tomos & Carol Haynes
I could offer a VAT invoice/receipt manually which is something I do monthly for my regular consulting business (I have a company in Sweden). But the consulting work I do requires 1-4 invoices per month to other Swedish companies so the VAT aspect is trivial I charge it and pay it to the Swedish government and they then claim it back. But for e-commerce the situation becomes more complicated - there are five scenarios that I have to handle.

1. Non-VAT registered within the EU: Private person or registered company not requesting VAT-free purchase. I am required to add the Swedish VAT to what I charge and pay it to the Swedish tax-authority.
2. EU company claiming VAT-free purchase (valid VAT-nr): I am required to verify that they have a valid VAT-registration number then I should not add VAT - but in my accounting I need to add the VAT (separately) as if I had charged it and then get the VAT debt cancelled - since I never actually got that money I don't need to pay it to the tax-authority.
3. EU company claiming VAT-free purchase (invalid VAT-nr): If the VAT-nr does not check out, then I must add Swedish VAT and pay that to the tax-authority. The foreign company can then request a refund of the VAT from the swedish tax authority.
4. Swedish company: I am required to add the Swedish VAT to what I charge even if they request a VAT-free purchase with a valid EU-VAT number
5. Non EU company or person: I should not add VAT for sales to people or companies who are outside the EU. I believe that I do not need to add then deduct VAT in my accounting but I do need to hand in a quartely statement of how much I have sold outside the EU.

Even at very small volumes staying within the tax laws using a payment provider like Paypal with no support for checking VAT numbers etc where I have to issue different receipts for the same product depending on what I can find out manually is just out of the question. Or I could create my own automated PayPal VAT checking solution but that is just too much work considering there are other providers who handle this for me and then just send me a monthly statement with info I need for my book-keeping.
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Carol Haynes
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« Reply #12 on: March 25, 2012, 03:35:59 PM »

Actually it boils down to three options:

1) Inside EU - individuals or non-VAT registered.
2) Valid EU VAT registered company
3) Outside EU

From the form people complete on your website the EU/non-EU status is easily determined. Just check the country of origin.

The VAT status is easy enough to check automatically. Just use the script I pointed to in my last post.

Only apply a VAT rating for people in category 1 - calculate it before you submit the form to PayPal or any other processor. If the VAT registered test fails don't accept the order until they check the VAT ID or remove it.

All of this can be automated by a script on the order page so you don't generate unnecessary paperwork and delivery can be automatic.
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umeca74
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« Reply #13 on: April 03, 2012, 01:03:12 AM »

I use plimus/fastspring
People that use paypal go for e-junkie, but I'm not sure if it does VAT properly
http://successfulsoftware...egistration-with-ejunkie/
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