Payment Processors- FastSpring and PayPal

Choosing a payment processor for your company is one of the most important decisions you will make. You rely on them keeping the trust of your potential customer who has decided to buy your product. You rely on them to always be available, to deal with any billing problems, to manage chargebacks, refunds and notifications.

And most of all- you rely on them to collect your customers' money.

I can say- without reservation, that I made the right choice in going with FastSpring (http://www.fastspring.com):

• Great customer Service- respond to emails very quickly
• Good presence in ISV community- e.g. on Joel on Software Business of Software forum
• No upfront/ongoing charges
• Higher transaction charges than other payment processors
• Easy to customise payment process- e.g. I send a HTTP notification to my webserver to generate a license key

A couple of weeks in however I noticed I was getting hit with VAT on all my transactions. There's nothing FastSpring can do about this- they resell your software, and as a large company are obliged to charge VAT at 15% to their European customers. This is especially painful as all my customers are in the UK- so it applies to every single transaction.

In the hope of increasing my profits by 15% I decided to investigate PayPal:

• More difficult to set up- documentation spread all over the place, and forum answers sometimes misleading
• Low transaction charges
• No support for discount codes/vouchers (this really surprised me)
• No experience with customer service yet- but I've heard bad things

I now run both side by side- though I try to steer users onto the PayPal payment option rather than FastSpring (Buy Page) as I make over 15% more per PayPal order.

Despite this- I still find that roughly half of my users prefer to use the FastSpring payment option- and I'm not really sure why- I'd be interested if people have any ideas about this.

How it all got started

Like many of the best things in life- my micro ISV adventure started almost completely by accident.

I failed my driving test. I managed to drive into a bus lane- whoops.

Now, as anyone who has tried to book a driving test in London will know- the waiting list is about three months (as I write, the closest test in Barking is three months and a week away).

My driving instructor told me that it was possible to get closer tests- all you had to do was check the test booking website non-stop for a few days, and when someone cancelled their test, you could leap in and take their slot.

Unfortunately- I have a day job, and understanding as my boss is, I couldn't see him, or the rest of my team putting up with checking the DSA website all day trying to get a driving test.

So, I did what any self respecting computer programmer would do- I automated it. Just put together a quick bit of .NET code which would check the website every few minutes for me, and then email me when a new driving test came up. Simple- and it worked, within a couple of days I had a new driving test.

A couple of weeks later, my girlfriend was off work with swine flu, and I was quarantined at home too- with nothing to do. I decided to polish up my solution, knock up a website and see if anyone else was interested...

And so, Driving Test Cancellation Checker (http://www.drivingtestcancellations.co.uk) was unleashed onto the world.

Welcome

Hi- and welcome to the blog of Stratford Software- a Micro ISV based in London.

My name's Tom Gallard, and I'm the founder of the company (company might be pushing it a bit- its really just me!).

At the moment we've got one product- Driving Test Cancellation Checker (http://www.drivingtestcancellations.co.uk) which launched just over a month ago, and is doing pretty nicely. In the next few months' blog posts, I'll be talking about some of the following areas.

1.) How it all got started

2.) Payment processors- Fastspring and PayPal

3.) License generation

4.) Bug tracking with Fogbugz

5.) Website design, analytics and tracking (Google Analytics, Crazy Egg)

And doubtless, lots more.

I'll also name a few of the blogs, books and other resources I've found most useful in getting this company up and running.