Selling services or digital products online is a popular business model as it does not require a lot of startup capital and can be extremely profitable. Not having to buy inventory or rent office space are just a couple of reasons this business model is so widely pursued.
Getting a website set up use to sell services and information products is now easier than ever before. Some services allow you to get started without having to set up a shopping cart.
I looked into quite a few payment processors to decide on one to use for this business and others. Here are a few services that you may want to look into if you want to sell digital products or services online.
What you need to accept payments online
To accept payments online, you use need the following:
- Shopping cart – This software allows customers to purchase items from your website.
- Payment gateway – The payment gateway authorizes credit cards or payments for online transactions.
- Merchant account – Your merchant account is the bank that accepts payments for you and then deposits the payments into your bank account.
Some payment services available now make it easier to get started by incorporating some or all of the above features into their platform.
Recurring Billing – 3rd Party Payment Processors
Aspiring entrepreneurs love the idea of recurring billing because it provides regularly predictable income. And as your customer base grows, your business grows as well.
Third party payment processors make it easy to sell without having to worry about setting up your own cart or PCI compliance. Here are a few tools that you can use for recurring billing.
- Recurly
Pricing: Starting at $99 / month
Fees: 1.25% of revenue + $0.10 per transaction (+ gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, ACH, Invoicing, Amazon Pay, Apple Pay, Paypal
Recurly is a pretty robust selling solution and you can do one time charges, fixed recurring charges, recurring charges based on number of users, usage based charges or a combination of all of the above. It integrates with Salesforce, Mailchimp, Quickbooks, Netsuite and several other apps and can incorporate sales taxes. They offer their own gateway called Recurly gateway if you don’t have your own payment gateway already.
They also have features that maximize revenue like a card updater that automatically retries decline credit cards, provides fraud protection tools and allows you to provide free trials without requiring a credit card up front.
- Chargify
Pricing: Starting at $149 / month
Fees: 1.2% of revenue (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, ACH, Invoicing, Paypal, Direct Debit (coming soon)
Chargify has many of the same features as Recurly, including a smart system for retrying failed credit cards and managing past due accounts, one time and recurring charges with optional set up fees and free trials, and analytics and financial reporting. One nice feature is that you can test different price points to see what works better for your products.
Chargify integrates with Quickbooks Online, Salesforce, Mailchimp, Shopify, Xero and more. State sales taxes are automatically calculated.
- Chargebee
Pricing: First $50k is free, Paid plans starting at $99 / month
Fees: No transaction fees ($0.50 per invoice if you go over 200 invoices per month) (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, ACH, SEPA, BACS, Paypal, Offline Payments
One attractive feature of Chargebee is that you can get started for free until you do $50k in sales. They also have no transaction fees other than a small fixed invoice cost if you go over the allotted 200 invoices per month. They offer recurring, one time, metered / usage based billing and tax support. Dunning management reduces churn from failed payments and reporting is also available.
Currently, they support less payment gateways and have less integrations than their competitors but still integrate with some of the major players, like Quickbooks (online version) and Xero.
- Fastspring
Pricing: Free pay as you go plan for new businesses, Paid plans starting at $199 / month
Fees: No monthly fee – 5.9% + $0.95 per transaction, contact vendor for higher volume pricing (+gateway fees)
Separate Gateway Required: No
Payment Options: Credit cards, Paypal, Checks, Bank transfers
Fastspring is another payment provider that offers recurring billing. Their website says they work with SAAS companies, but the representative that I was in contact with said that they are geared towards companies that have digital products for immediate download, so they were unable to set up an account for services like web maintenance and hosting. Their shopping cart is customizable and also has licensing capabilities and digital rights management. Fastspring uses Dunning management to increase customer retention by automatically handling failed payments.
You can get started for free with no monthly fees, although their transaction fees are higher than others. Once you get a good volume of sales, you can switch to a monthly plan which likely offers lower rates. Another nice thing is that you don’t have to get a separate payment gateway or cart.
Premium users can get access to their affiliate program set up at additional cost, which allows you to run your own affiliate program to increase sales. You will need a developer to integrate with other 3rd party platforms, like your accounting software.
- Avangate / 2checkout
Pricing: No monthly fees
Fees: 2.9% + 0.30 per transaction.
Separate Gateway Required: No
Payment Options: Credit and debit cards, Paypal
2Checkout allows you to accept payments on your site without having to get a shopping cart or separate payment gateway. It does integrate into many carts, but you can use their inline or pop-up checkout instead to create a seamless experience for your customers. With no monthly fees and low transaction fees, 2Checkout is a popular choice for people who are just getting started.
The downsides include that you can’t edit email templates and the fees are higher than other competitors once you are doing a high volume of sales.
- Cleverbridge
Pricing: Unknown, mostly based on percentage of transaction amounts
Fees: Unknown
Cleverbridge simplifies subscription management and makes it easy to stay PCI compliant and secure. Customers can update their own payment information and upgrade and downgrade their accounts themselves. You will have to contact them to get pricing info.
- Zuora
Pricing: Unknown, Set up fee is in the thousands and they take a percentage of revenue
Fees: Unknown, they take a percent of revenue
Zuora is an enterprise level recurring billing and invoicing solution for companies generating between $1-5 million annually. You can easily implement various pricing models and create a self-service hub for customers to update their own information. Other features include multi-channel commerce and analytics.
More info – https://www.quora.com/Does-anyone-know-the-cost-to-use-a-solution-like-Zuora
https://chargify.zendesk.com/hc/en-us/articles/202804674-How-does-Chargify-compare-to-Zuora-
- Sam Cart
Pricing: Starting at $99 / month
Fees: No additional fees (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit card, Paypal
Sam Cart is a cart designed to sell physical or digital products and was created by veteran internet marketer Brian Moran. It integrates with email providers like Mailchimp and AWeber and can create membership access for Wishlist Member, Kajabi, Teachable and other platforms. Sam Cart was designed to maximize conversions of visitors into paying customers with features like easy to generate product pages and upsells / downsells. Analytics and reporting also included.
- WHMCS (Web hosting)
Pricing: Starting at $16 / month
Fees: None (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit card, Paypal
WHMCS is a popular cart for web hosting as it integrates with Web Hosting Manager (WHM) and can send automated payment reminders and invoices. You can also set up other products including one time payments and also automatically add late fees if desired.
E-commerce
Selling physical products using a subscription model can be a fun and lucrative business. Here are just a few platforms that you can use to easily get started in e-commerce.
- Cratejoy
Pricing: Starting at $39 / month
Fees: 1.25% + $0.10 per transaction (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards
Cratejoy is a subscription box marketplace and e-commerce platform to sell physical products via subscription. Cratejoy makes it easy to get a website up and start selling and includes subscription management features, automatic tax calculations, coupon codes and refer-a-friend functionality. You can list your store on their marketplace for additional exposure for an extra fee.
- Shopify
Pricing: Starting at $29 / month, 14 day free trial
Fees: 2.9% + $0.30 per transaction (+gateway fees or you can use Shopify payments as your gateway)
Separate Gateway Required: No, but you can use your own gateway if desired
Payment Options: Credit cards
Shopify is another hosted e-commerce platform that makes it easy to get up and running quickly without having to worry about PCI compliance or designing your site. You can create discount codes and print your own shipping labels. The advanced plans allow you to create gift cards, abandoned cart recovery and create advanced reports.
- Woocommerce Subscription
https://woocommerce.com/products/woocommerce-subscriptions/
Pricing: $199 for one year support and updates
Fees: None (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, Paypal
If you are using WordPress and WooCommerce (one of the most popular e-commerce carts for WordPress), then you can get the WooCommerce Subscription plugin if you want to sell subscriptions. You can offer free trials, charge signup fees and view detailed reporting. Subscribers can even manage their own accounts and get renewal notification emails automatically.
Note that other coders have created subscription plugins for WooCommerce, but the official one works best and has the most features.
- Magento
Pricing: Free
Fees: None (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, Paypal
Magento is a popular open source e-commerce cart that has a lot of functionality. Although it is free and robust, you will likely want to get a coder to set up your site for you. Setting up your own e-commerce site is the most difficult option, but might be a good one if you require a lot of customization and have the budget for it.
Video Courses
Selling courses is a good way to create scalable revenue for your business. Once your course is complete, you can focus on marketing it.
- Teachable
Pricing: $33.25 / month
Fees: 5% transaction fees
Separate Gateway Required: Yes
Payment Options: Credit cards, debit cards, Paypal
The Teachable platform makes it easy for infoproduct creators to make money teaching their own video course. You can actually set up the platform on your own domain. You can drip content, create coupon codes and set up an affiliate program (although you will have to handle the payments if you are not using their gateway). The pro plan has a higher monthly rate, but no 5% transaction fee and allows you to have an unbranded site.
- Udemy
Pricing: Free
Fees: None (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit cards, Paypal
Udemy is another popular site to add your own courses and make money. Udemy will drive traffic and help promote courses for you, so you can make a little money just by uploading good video courses. Note that Udemy is also a bit competitive, so there are a lot of lower priced courses here.
Digital Products (General)
Digital products like eBooks are an easy way to get started in digital e-commerce.
- Restrict Content Pro
https://restrictcontentpro.com
Pricing: Starting at $99 / year
Fees: None (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit card, Paypal
If you want to create a membership site, Restrict Content Pro is a membership plugin and cart that you can use to create member only content. You can create unlimited member packages, manage members, get reports and create discount codes. Customers can manage their payment details and upgrade / downgrade their accounts from the customer dashboard. You can also export member data and run reports.
- Gravity Forms
Pricing: $199 for a one year license
Fees: No additional fees (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit card, Paypal
Gravity Forms is a popular WordPress forms plugin that you can use to create a payment form for your products or services. The plugin can be purchased for as low as $39, but you will need the developer license for $199 to integrate Authorize.net, Stripe or Paypal gateways for e-commerce. This approach might be worth considering if you are selling a simple product or service. Can also handle recurring payments.
- SendOwl
Pricing: Starting at $9 / month
Fees: No additional fees (+gateway fees)
Separate Gateway Required: Yes
Payment Options: Credit card, Paypal, Apple Pay, Bitcoin
SendOwl makes it easy to sell digital products on your website by taking care of integrating with payment gateways and handling the digital delivery of your infoproducts. They also allow you to recruit affiliates, create upsells and discounts, handle cart abandonment and offer pay what you want pricing.
Asides from eBooks, you can also sell subscriptions, license keys, memberships (integrates with Wishlist, S2Member, Member Mouse and other plugins) and has drip functionality to gradually release content to your customers.
- Gumroad
Pricing: Starting at $10 / month
Fees: 3.5% + $0.30 per charge
Separate Gateway Required: No
Payment Options: Credit card, Paypal
Gumroad makes it easy to sell digital products online and you can even offer rentals where a customer can stream a video for a limited time. Gumroad can also handle digital goods, subscriptions, license keys, physical products and pre-orders. Other features include affiliates and analytics.
- Selz
Pricing: Free version available. Shopping cart version starting at $17.50 / month
Fees: 0-2% transaction fee + 2.9% + $0.30 per charge processing fee
Separate Gateway Required: Yes (they also have their own Selz gateway)
Payment Options: Credit card, Paypal
Selz allows you to quickly set up a website using their themes and your own domain name or sell from your existing website. They can do digital product delivery and the advanced plans offer license keys, cart abandonment and tax invoicing. A nice thing about Selz is that you can get started for free.
Payment Gateways
Some of the platforms I mentioned require their own payment gateways. Note that free gateways like Stripe usually have higher transaction fees. Here are a few popular ones to choose from.
– Stripe
Pricing: 2.9% + $0.30 per successful charge
Stripe is a popular payment gateway because there is no monthly or set up fee and you only get charged if someone buys something. Some people also say that Stripe will sometimes side with the merchant when a dispute arises. Customer support is hard to reach and can be slow though.
Pricing: 2.9% + $0.30 per successful charge
Braintree Payments by Paypal is similar to Stripe except they also offer Paypal payments and Bitcoin.
– Paypal
Pricing: 2.9% + $0.30 per successful charge
Paypal is a simple way to start selling on your website. If you don’t have a lot of transactions or need any automation, then you can just sign up and place a Paypal button on your site. The downside is that not everyone likes using Paypal and you will make less sales than if you also offer credit card payments.
Pricing: 2.9% + $0.30 per successful charge, $49 set up fee and $25 monthly gateway fee
Authorize.net is a popular gateway that’s been around for a long time and integrates with most shopping carts. Their chargeback fee of $25 is higher than other services.
Questions to Ask Payment Processors
Before you sign up for a payment processor, here are a few questions you should ask:
- Do you support my payment gateway (if you already have one)? Do I need a gateway or is it already integrated?
- Would I need to use my own shopping cart?
- Does it integrate with accounting software?
- Can you handle something like e-book sales or automatic access to membership sites (WordPress site)?
- Is there a video or demo site showing what it would look like on a live site?
Stripe are crooks they let you build your biz and then withold 25% for 3 to 6 months
Any start up will be killed a criminal way of working I dont understand that this
Is allowed they must be stoped