Ask YC: Online Payment Solutions • Hacker News Board

Post by ja » Sun, Jul 20, 2008, 8:24 AM UTC

Hi Guys, I am in the planning/feasibility stages of a startup; One of my stumbling blocks is managing online payments.

Specifically, i am creating a community where users exchange goods, and the money accrues to their account on our site. They can add money to their online account via credit card, and later, they can transfer their money to out of our site to their bank account.

So, in essence, they will have a 'virtual account' on our site, and they can add to this account and withdraw money to their real bank accounts.

My question is if anyone has any suggestions on how to handle this kind of payment system? I have researched PayPal and a few similar services. The transfer fees seem expensive, and I estimate that these fees will quickly rise to cut the margins with the many small transfers expected (<US$15).

Post by ScottWhigham » Sun, Jul 20, 2008, 11:09 AM UTC

I haven't done what you're talking about butI can offer a suggestion based on my experience: offer them choices of how to pay. Some people like PayPal, some want to pay by credit card, and still others want Google Checkout. If I had to guess, you should accept credit cards directly - so budget 3-10 days for developing that. Add another 3 days for PayPal and 1-5 days for Google (depending on what level of integration you want) if you choose to give your customers a choice.

I suggest this because, when we offered a 2nd choice of payment on our sites, we found that we did 20% of sales through that 2nd choice! Was that 20% of sales who would've not bought the other way? Unknown but 20% is a sizable figure.