Accepting my first credit card payment without PayPal, part 1/2
This is a bit of "behind the scenes" post. We've been selling surprise japanese candy subscriptions online for about a year now, all through PayPal up to now. Today, we finally charged our first customer without them.
There's a lot of PayPal hating out there, but personally I've never had any major issues accepting payments through them. I've been a user for years and accepted thousands of payments. Still, I thought it was a bit risky to solely rely on them and conversions might also be taking a hit every time I throw a user off to PayPal land instead of just asking for their credit card info on my own site, so about half a year into the Candy Japan project I started to look a bit more seriously into it.
It started when I came across a free ebook (eleaflet?) called "How to be a Credit Card Processing Ninja" (author told me it is no longer updated since FeeFighters got acquired). It explained how the whole system of accepting credit cards roughly works. Gaining a bit of understanding of the process motivated me to push on. Not all of it applied to me, as I wasn't really in the position to start comparing payment gateways against each other, my problem was more about finding one that would even accept me as I'm not based in the US. Before I realized that I did try contacting Braintree and Authorize.net. From Braintree the reply was "We are currently only set up to provide merchant accounts for businesses with a physical U.S. presence" and the same for authorize.net. So how about Stripe?
In 2011, on impulse I signed up for the Startup School event, which is a Y Combinator event consisting of lectures and mingling with other startup founders. I flew over from Japan and watched the presentations in total jetlaggety state (protip: if flying over, give yourself time to rest before the actual event begins). There were YC company office visits available, one of those being Stripe. They're a cool payment processing company backed by Elon Musk among others, who interestingly was one of the founders of PayPal. I got to chat personally with the Stripe guys, but sadly it turned out that they wouldn't be able to help me either, I really need to be in the US to use them.
Well, I wasn't in any particular hurry to get a new payment system up since PayPal was working OK, so several months passed while I just kept my eyes open for any new information. On Hacker News I kept noticing several mentions about services that help you manage automatic billing, such as Recurly and Chargify. One evening I was just randomly browsing the Recurly support site, fully assuming I wouldn't be able to use them. Going through their list of "additional payment gateways", right near the end it mentioned a European payment gateway company I hadn't heard of so far.
Checking up on them I found out they can also help other Europe-based businesses take credit cards. I still wasn't sure if I could be accepted there, so I sent them an email to see if they might really be able to help. I got a response very quickly and just a week later our discussion had proceeded to the point where I had their price list, along with a list of documents I would have to provide to them. In the end being a sole proprietor not all of the items on the list applied to me, but I did end up sending them (in case you are thinking of doing this): an official certification of incorporation, a copy of my passport, a description of the ownership structure (using a form which they provided me), copy of a utility bill to prove my residence, a document where I free-form explained what kind of things I would be charging for and then finally a signed copy of contract to open the account with them.
This might seem like a lot of documentation to provide, but in the end the application process was tolerable and everyone I interacted with at the gateway company responded very fast and helped me through the process, providing me with help on any specifics, making the process smooth. That wasn't the end of it though (about halfway through), so in my next post I plan to share how the process was finalized and all the final steps I had to take before I finally saw my first Recurly transaction come in.
Thanks for reading and do check out Candy Japan if you'd like to see the shiny new credit card sign-up form in action (and some exotic munchies). Here's how we celebrated our first accepted payment.