How to choose an online payments provider

We have recently been around the houses with our experiences with online payment solutions recently and thought we'd share some of our heartache so you don't have to go through the same things.

Reputation Monitor is an online service we provide that is paid for monthly by credit card. When we were building it, we went through a few options trying to decide who we should use to help us take and process those payments and ended up settling on Barclays' ePDQ system. We bank with Barclays and have had a fantastic experience with them generally (our local business manager is very good - if you're in London and bank with anyone else, or don't know the name of your bank manager, let me know and I'll put you in touch).

The reasons for going with Barclays, beyond already banking with them, were that they claimed they could handle all of our requirements, including:

- accepting payments in more than one currency (we wanted to offer GBP and USD) - setting up and managing recurring monthly payments

The first chink in the armour came when we tried to download a spreadsheet of payments received. We wanted this in order to:

- reconcile our accounting software - automatically mark accounts as paid when users' recurring payments went through (we'd already resigned ourselves to the fact that they wouldn't update us electronically via an API when each month's payment was received)

It never crossed my mind that an online payments provider wouldn't offer this service, yet apparently it is only available on their packages for bigger businesses. All they could offer us was a monthly paper statement (not particularly good for either purpose, especially as it only told us amounts received, not who they came from) and an online area where we could log in and create online reports. Without scraping these reports, we couldn't come up with any good way of getting our payments in electronic form.

It turned out that they weren't very good at meeting our direct requirements either. Our first USD transaction failed. When we called support to find out why, we were told that our USD 'store' wasn't set up. This was a bit strange as (a) it was part of our core requirements and (b) why should we need a whole other store? Surely all it needed was to allow USD payments?

Noooo. Apparently we had to integrate with an entirely new store to accept the USD payments. We started going down this route, but as more and more hurdles were put in our way, we ended up re-thinking and re-visiting our options.

##Should you use Google Checkout for accepting credit cards online?

One of the first options we went back to was Google Checkout - we have used it successfully for accepting payments for our recent seminar as well as for a number of clients and other projects so we knew it worked well. We were also pretty confident it would handle multi-currency requirements smoothly - Google's usually pretty good on the international aspect of its services. Finally, it had an additional benefit over Paypal that the money is deposited into your bank account quickly and automatically without requiring you to login and transfer to your bank.

The hurdle that prevented us being able to offer our users this option was that Google checkout does not allow you to set up recurring payments! This was a pretty big flaw in that plan and led us to reject checkout (reluctantly).

##It appears that Paypal is the best provider for accepting recurring payments

We have used Paypal for a few things in the past - both for clients and internal projects. We had felt that it could appear slightly less professional than some of the other solutions (especially for business to business transactions) but they have greatly improved their service recently and, in particular, they are the only provider I have found that offers:

- recurring payment handling and management - sensible multi-currency support - statement download in many formats - automatic notification to our software of successful recurring payments - automatic notification of cancellation of a subscription

Given that it is also free to set up and charge a comparable percentage of credit card transactions to the big merchant account providers, it seems to be far and away the best solution at the moment.

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About the author
Will Critchlow

Will Critchlow

Will founded Distilled with Duncan in 2005. Since then, he has consulted with some of the world’s largest organisations and most famous websites, spoken at most major industry events and regularly appeared in local and national press. For the...   read more