Live data from Hacker News

SaaS for US customers but located offshore

news.ycombinator.com

1–7 of 7 posts

SaaS for US customers but located offshore

#1
What are the options for a SaaS firm thats offshore based but targeting US customers in terms of engaging with merchant gateways?

a. Can an international firm signup with the likes of Paypal Merchant, Authorize.net etc and charge recurring US dollars on CC's? b. If US registration is mandatory, is there an EASY and straightforward way to register a firm in the US to offer SaaS with no US presence? c. Is there a third country (avoiding the term tax haven!) with lax Tax laws and registration ability that can achieve direct selling with US customers and be completely ligit?

Thanks Ali http://www.7vals.com

Re: SaaS for US customers but located offshore

#2
There are many varieties of "offshore" for this question. I am not routinely inconvenienced by being an American living in Japan with regards to charging for things. If you're a Nigerian living in Nigeria... things are going to be a wee bit more difficult.

One does not practically or legally need a physical or corporate presence in the US to charge cards. Of the available options, I use Paypal to charge credit cards -- they had the least involved process to get a Paypal account (Paypal Website Payments standard + Paypal premier account) years ago, and I bootstrapped that into their I-can't-believe-its-not-a-merchant-account (Paypal website payments pro + business account) after a few years of doing (relatively) significant volumes through Paypal proper. That has been impressively painless.

Privilege escalation is, by and large, the easiest way to get into the US banking system. As soon as you're in a bank's systems and they have their Know Your Customer checkbox ticked next to your application, your odds of not getting held up by fraud review for the next product you add go up greatly. (This is why the tech incubator I used to work at would set up anyone going to the US with personal checking/investment accounts at US multinational financial firms. As soon as you have a foot in the door, everything else gets easier.)

Understand that businesses do not refuse to do business with foreigners because they enjoy screwing with you -- it is strictly risk-mitigation. There are a variety of things you can do to reduce perceived risk. In general, things which tend to indicate you're a "real" business tend to work. (Tax forms are practically magic spells -- they look official, it is virtually impossible to second-guess their contents, and the IRS will virtually never tell you "Piss off, we don't want your money.")

Re: SaaS for US customers but located offshore

#4
PayPal can be used internationally, but it has some caveats.

Simple recurring billing works quite well, except that you have no control over the subscription. Only thing you can do is to cancel it via PayPal interface. Multiple plans become quickly painful.

There's also Adaptive Payments API, which is available for non-US companies. PayPal doesn't really trust you: subscriptions are limited to one year in length, but you have the control of when and how much is billed (within limits of the "preapproval"). Adaptive Payments API is quite painful to use and is challenging from UX point of view. It's probably cheaper to incorporate in the US and use some other merchant gateway than to implement PayPal Adaptive Payments in your software.

Re: SaaS for US customers but located offshore

#5
Our company is based in Denmark, which means we can't use Authorize.net or the real PayPal services, or any of the commonly recommended services.

However, we're using a local bank, a local payment processor, and a local payment gateway, and it works just fine. We can do recurring charges on the major credit cards in whatever currency we want.

The one thing that doesn't work is AMEX, for some incredibly stupid reason we were only allowed to charge those cards in DKK which didn't make any sense to us, so we promptly cancelled that contract.

So my advice is to investigate your local options as well. Ask your bank what processors there are, and ask your processors what gateways there are.

Re: SaaS for US customers but located offshore

#6
PayPal and 2Checkout seem to be the two popular options.

Depending on your country you can probably find a local merchant account that will let you bill in USD, Chargify have a list of non-US merchant account providers which they've worked with in the past.

Re: SaaS for US customers but located offshore

#7
Paypal is very expensive in terms of fees! We opted for a local card processor. They all offered us less than 2% for every transaction and a fixed monthly fee for the service. C

Compare that with Paypal! Paypal is great for quick and easy implementation - but at the end you pay a lot more..