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I'm bootstrapping a software business for the first time. I worked in 'stealth mode' for one full-year and now I've got about 100 private-beta-testers loving the software (and already begging for rebates once it goes 1.0 ;) and I'll soon start working on payment processing, which brings to my question(s)...

For credit cards, I'm considering FastSpring which I've heard good thing about (both here and elsewhere) and I haven't found much on the following subject: are payments processors like FastSpring mutually exclusive with regards to other payments processors or to ewallets like Neteller, MoneyBookers, PayPal, etc.?

Can I legally use, say, FastSpring to process all the credit cards payments and process PayPal, Neteller and MoneyBookers directly myself?

What about using, say, FastSpring, to process one credit card payment out of two and another credit card processor to processor the other? (It's a theoretical question, to better understand what is at work here).

Can payments processors companies legally force exclusive agreements? Are some doing it?

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Google "Paypal horror story" before choosing them as an exlcusive payment processor ;) I guess every payment processor has its share of horror stories but lately (blog.apparentsoft.com/business/124/…) Paypal is getting bad press. – Olivier Lalonde Jan 5 '10 at 5:54

5 Answers

up vote 5 down vote accepted

No, they're not exclusive (and if any suggest that they're giving you an 'exclusive' deal, run away).

Some people have a second processor as a backup in case the first one is down. If you do sign up with more than one, then there's nothing to stop you routing some transactions to one and some to the other.

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Thanks a lot, this is very good news :) – Tristan St. Jan 5 '10 at 1:00
up vote 2 down vote

Someone had asked about whether something like FastSpring has to be exclusive. There are some ecommerce companies who will ask you to sign an exclusive agreement. FastSpring doesn't. It is always a good idea to have at least 2 providers. While we've never had real problems, throughout the history of ecommerce, there have been horror stories of small companies who are basically paralized when tiher downtime or some type of account dispute shuts off sales. Always have at least 2 available providers, even if you only use one of them actively.

Ken White Chief Customer Service Officer FastSpring Email: ken@fastspring.com

FastSpring offers a next generation Java-based e-commerce payment, merchandising, and fulfillment solution for software publishers which is focused on customer service, flexibility, and reasonable pricing. View the Flash Demo at: http://www.fastspring.com/

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up vote 1 down vote

Denis' answer is right on.

For your benefit, the more you'll process with any one processor, the better rates they'll give you. Thus, as you ramp up sales, go back and get new quotes from them (and others) every 12 months or so. Don't sign any contract locking you in. For this "volume discount" reason, it doesn't make too much sense to spread them around.

Having FastSpring and PayPal should be all you need (and perhaps Google Cart, but I believe their rates are higher than PayPal, in which case leave them out).

Best of luck!

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up vote 0 down vote

FastSpring and most other credit-card accepting payment processors can also accept payments from PayPal accounts, so you don't have to have a separate PayPal payment method through direct PayPal integration.

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up vote 0 down vote

if you want exclusivity, you need to pick a processor with killer features, if you have a ready market, you could win exclusivity for your market @ a price that keeps you competative

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