I have a subscription-based service where users pay on a monthly basis and the subscription is about $6/mo. The initial focus is on the US, but eventually there will be expansion to other countries. I am planning to use PayPal for this to do the credit card processing and I do not want to store credit card data. I like PayPal because everyone knows it and it does ongoing subscriptions. My concern is the fees, especially for smaller transactions like this. They have micro-payment rates, but that is expensive as a percentage of each transaction. I am afraid that if I start using PayPal, I'll be locked into them with no negotiating leverage when traffic grows. Are there practical alternatives to PayPal for this - maybe companies that allow several options? Thanks for any advice.
Once your overall volume increases they have set discounts, but their is no negotiating with PayPal. Also, if all of your transactions are $6, is the micro-payment option really a bad option? With the much lower transaction fee, I would be surprised if your overall fees were not less, while the percentage might be higher. Now if you are offering a longer term at a discount, this will raise your average transaction so the micro-payment option might not be a good fit. As for other option, google checkout has similar fees, alertpay is a little higher, but I feel much better fraud protection then PayPal or google checkout. Google Checkout sends more fraud then actual orders
Thanks to both of you. mitgib, when you say "but I feel much better fraud protection then PayPal or google checkout" - it looks like you are missing a word or two and I'm not sure what you mean - you feel there should be much better fraud protection in these two services?