Tuesday, November 11, 2008

Decision Time on a new credit card vendor

It looks like our business model for membership on the site will be: annual recurring billing.

Question 1 - Is there any reason not to just go with paypal. It looks easy to setup. They have a clean API, plenty of support, and their costs seem reasonable?

Question 2 - I don't think an "annual recurring" makes any sense. I think we'll get a lot of chargebacks if we just do a recurring billing after 12 months. And a lot of credit cards will have gone bad.

If you have advice or proposals, you can comment here or email to creditcardsonline101 at gmail.com for more info.

The site that we are looking at putting htis on had 1.4 million visits last month. We're expecting to charge $25/year and have 400 payments per month. Figure a $500K revenue stream the first year. Then it'll grow...

1 comment:

Michael said...

Hi John, monthly recurring billing makes more sense. For instance, sales genie uses this method. Chambers of commerce tend to do annual, then have a hard time getting folks to sign up again.

You can actually make more revenue with monthly versus annual as long as you don't divide exactly by 12. For instance, $7 per month sounds better than $60 per year, even though $7 per month brings in more revenue.

I've seen IM people use $9.99 per month, and most business owners just don't seem to notice. Now, not sure of your site or service - these are just examples outlining that monthly billing is, in my opinion, the best way to go.