Amazon FPS vs PayPal vs Google Checkout

Question

I'm in the very early stages of planning a new website. I would like to offer payment processing for two distinct use cases:

1. Accepting payments from users to me for SaaS functionality on a recurring basis.
2. Facilitating payments between users of the website.

The ratio of users making payments to users receiving payments will be approximately 100:1. I mention this because I want to make sure it is very easy for users to make payments, but can live with some additional hassles for users who want to receive payments.

I have not settled on a business model, but I am considering charging a small middle-man fee in use case 2 above. I plan on using a python framework to implement the website (leaning towards django or web2py), so existing python module support would be a plus.

My question is this: should I use a particular payment gateway (and if so, which one) or should I provide support for multiple payment gateways (and which ones)?

EDIT: How much of a nightmare is it to roll your own payment gateway? In other words, would it be worth the trouble to accept and process Visa, MasterCard, Discover, etc directly? Anybody have any experience doing that? Liability/security concerns more hassle than they're worth?

Answer 1

Are you going to accept credit cards and electronic checks? Is this app just for your own use or are you going to sell it for others to use as well?

Use case #2 could be a bit more difficult. With credit card payments you could run into problems with being classified as an account aggregator. The other issue is that you would also probably be required to have a money transmitter license for each of the states that your users are in (unless they are in one of the few states that don't require MTLs).

Use case #1 would be much easier. Let me know if I can give you with a hand with it.

Jeff

Answer 2

I just came across the following service: BrainTreePaymentSolutions and they appear to be the Webfaction equivalent of payment gateways; ie, not necessarily the cheapest or biggest available but maybe the most honest and easiest to work with (at least based on their stated philosophy and--apparently--top notch python support).

I'm posting this as a separate answer, rather than an edit to my original question because I am especially interested to know if anyone has any experience with this specific company. They look like the kind of folks I'd like to do business with.

EDIT: I called and talked with a rep from BrainTree. He explained that use case 2 as I described it is Third-Party Payments Aggregation and it is high risk (follow the link for full explanation). This only means that it is (much) harder to get underwritten for a merchant account. It's not impossible, either. However, the other things they consider when underwriting an account (processing history, capital reserves, etc.) are not exactly going to help my case at the outset.

My plan now is to start out with use case 1 exclusively and to plan for future support of use case 2.

Answer 3

Integrating with a payment gateway directly can be expensive and complicated. Many are based on stateless transaction models that will force you to store payment information to facilitate recurring payments. I'm not sure about the laws governing this for private companies, but public companies face Sarbanes-Oxley and a host of other relevant regulation.

We are considering zuora as an alternative to vendors like Amazon (who require your customers to have accounts with them) and direct payment processors.

Answer 4

As far as facilitating payments between users of the website, most banks now offer a "send money to a friend" option. I use "Chase" and all you have to do is login into your bank account, enter your email address and the email address of the person you want to send or receive money from. You type in the amount and provide a note (why do you want this money or why are you sending this money, could be a confirmation number) and click send. The bank then sends an email to the address provided and that person follows the links.

It is a great way to send or receive money without giving out any financial information. Only one of the people in the money transfer need to have an account with the bank. If both you have the same bank, you will instantly see the money in your account once they send it.