Handling payments on a website.

[JimC]

I am developing a website that will handle a paid monthly service to users. I would like to know how the mechanics of the payments would work.

Basically I want this:
- User registers and enters their credit card/bank card to subscribe to a monthly service plan.
- If they cancel payment, I want to be sure it stops the service.
- If they cancel service, I want to be sure it stops charging them.

What's a good way to do this? I assume a third party is best to handle the credit cards and charging, but how will it interact with my website?

In case I ever get tons of members, I expect the site to automatically handle the service. For example, if they miss a payment I want the site to automatically disable their service. And if they cancel their service, I want it to automatically tell my third party merchant to stop charging them.

I'm quite tech savvy and know PHP/MySQL, so don't be afraid to explain in tech terms. However, I have never handled any sort of online payments other than Google checkout, so the mechanics of charging for services is new to me.

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If you need more info, read on...

Here's what I would like if everything were perfect:

-User registers, enters their card info.
-Their card info is sent/saved to the third party merchant.
-Somehow, the merchant interacts with my database and sets that user to "active" and the service will work.
-When the user cancels their service on my site, the site tells the merchant to stop charging their card.
-When the user misses a payment, the merchant tells my database to set that user to "inactive".

In a perfect world, I think that's how it would work.

Also, I don't think its a good idea to charge everyone's card at a specific time every month. If payments are taken out on the 1st of every month, the person who signed up 2 days before would be screwed out of 28ish days of service. So the payment times would be different for each member.

I hope I didn't confuse anyone.

[borntosucceed]

I am pretty sure you should be able to use PayPal and configure it in a way that it does exactly what you want. I believe they even support reoccuring payments.

Otherwise you need to look for a merchant that offers a pay by the month option. You could also check out WorldPay.

Do you have already a merchant account with a bank? I remember when we were setting up our website this was a stumbling block for us as we were using a service and no products all the banks declined our merchant application. Note we were a new business at the time.

We then decided to go with PayPal. We had a couple of issues with PayPal not accepting valid CCs which was due to the fact the the customer had an existing PayPal account but choose to pay without logging into the account using their card.

[dave marshall]

Hi,

yes, there is an option on paypal for what you want.

dave

[JimOfferman]

I'm setting up a similar service using AlertPay instead of PayPal. It's quite simple, actually... your client signs for a subscription through AlterPay/PayPal and their server pings back to your server every time a (scheduled) payment is made. You just need to implement a script that processes those ping backs and handle the client administration on your end.

AlertPay requires that either the client or the merchant log into their server to cancel a subscription, but otherwise their system is pretty much what you want.

(If you'd rather go with PayPal, I think their service is similar, although in my experience a bigger pain to implement, which is why I switched)

PM me if you need more details.

[JimC]

Thanks for the advice everyone. I don't have a merchant account at the bank, but I will look in to it eventually.

AlertPay sounds about right for what I need. I'll check it out.

[Apollia]

Here's a rather unconventional idea. There's a massive multiplayer online virtual world game called Second Life. It has a virtual economy and "virtual" currency that can be sold for real money, and its own programming language called LSL.

It's possible to script objects within Second Life which interact with external websites - so, if someone pays an object within Second Life, that object can be scripted to let your website know about it. I haven't created anything like this myself yet, but I'm planning on getting around to it one of these days.

A couple websites which revolve around interactions with scripts in Second Life include SLExchange and OnRez, which are both shopping websites for virtual items - but as far as I know, there's no reason why someone couldn't set up a website to sell real world items and services with the interface to collect the payments being in Second Life.

One problem is, it might not look very professional to tell your users that they have to log into a computer game in order to pay for their subscription.

However, from a merchant's perspective, I think Second Life as a way to take payments is better than both PayPal and credit cards, since there are no fees on any transactions within Second Life (just some reasonable-seeming fees when you cash out), and, you don't have to worry about credit card chargebacks, or someone disputing a PayPal payment and getting your PayPal account frozen. All transactions are final, as far as I know.

I don't think there's any good way to take automatic recurring payments within Second Life. But, I don't think automatic recurring payments are a good idea anyhow - at least for any customer who is in a precarious financial position and is at risk of being slammed with tons of fees if anything pushes them over their credit limit or overdraws their bank account. I, as a customer, go out of my way to avoid anything which tries to set itself up to make automatic charges to any account of mine, so I would suggest making automatic payments optional.

Anyhow, not sure if this Second Life idea will be useful to you or not, but, just thought I'd mention it, since if I don't, probably no one else will, since this idea is so obscure.

Good luck.

[JimC]

Hi Apollia.

That's certainly an interesting idea. It doesn't apply to the business I'm running but it would be really cool to get involved in something like that.

A friend of mine makes about $20k every month just on selling scripted items in second life. It truly has lots of potential if you can become a guru at it.

I've even heard stories of crime/drug money deals being handled through second life. XD
Virtual goods/money is the economy of the future.

Anyway, I've been talking with Jim about AlertPay and it really sounds like an awesome service. It's very simple and powerful, so I will likely be using it. Thanks to everyone else for their advice as well.

[Apollia]

Originally Posted by JimC

Hi Apollia.

That's certainly an interesting idea. It doesn't apply to the business I'm running but it would be really cool to get involved in something like that.

Yes, I plan on taking my own advice eventually. It's the best low-budget, money-saving instant internet payment collection method I can think of, at least if you can reasonably expect your customers to be willing to log into a virtual world to pay you.

Which is currently unfortunately not a reasonable expectation for a lot of businesses - but perhaps this will change as Second Life becomes more popular and widespread.

A friend of mine makes about $20k every month just on selling scripted items in second life. It truly has lots of potential if you can become a guru at it.

Wow! That's incredible. Inspires me to keep striving to become a guru...

I've even heard stories of crime/drug money deals being handled through second life. XD

I guess any technology can be abused. Oh, well.

Virtual goods/money is the economy of the future.

Definitely.

Anyway, I've been talking with Jim about AlertPay and it really sounds like an awesome service. It's very simple and powerful, so I will likely be using it.

Excellent, I hope it all works out well for you.

Best wishes,
Apollia