Credit Card Processing, Recurring Billing, and Card Not Present

I sometimes think that the deck is stacked against me.  I am an online educational subscription service.

In other words, I'm a vendor of an intangible good sold with the card not present on a recurring billing basis.  The fact is that in a customer dispute or chargeback situation, the desk is stacked against me.

Nevertheless, we have a great business model. As long as our customers love our service, they let us bill them every month.   Granted, it's not as good as a gym who bills people monthly so that they can feel guilty about not going which keeps them from cancelling. That is an amazing business dynamic.

In our world, the partnership from the credit card processor is all important which is why I follow a blog called Creditcards101.com which has just started a series of articles about  recurring billing with card not present.

Click for a  Analysis of Business: Subscription Recurring  Model Metrics

Website Owners and Credit Cards

Care About Getting Paid?

If you have a web-based business, like it or not, you are in the credit card business.  Here's a few important points for different stages of your business.

Keep the credit card payment system simple at the start.  You can avoid the whole area by just signing up with a vendor who deals with all of the payment processing for you. For instance, use Etsy and they include the credit card processing. Or just accept PayPal. These are easy and appropriate ways to start.  But, lets assume that your business is now thriving and going up to and through $100,000 a year. Now, you are beginning to have the motivation to look at your business and you'll probably find that it's not yet worth the hassle of changing.   But, if you can get to a $100K, you can probably get to $200K, then $400K and now it is time to think about your payment processing.

What's wrong with Etsy or Paypal or any of the other real simple solutions?
- Cost. Paypal can take 3% or 4% or 5% of your revenue. That's a lot. And their reports are really difficult.
- Credit card recovery. This is a really important question if you are built on a monthly recurring billing model. Basically, if you have a gym membership and have paid attention to your credit card, you might have noticed that even when you lose your credit card and get it replaced, the damn gym continues to bill you. How do they do that?  Go over to http://www.creditcardsonline101.com  to learn about it.