You need:
1. Merchant Account 2. Payment service provider 3. Billing software (your own or someone else)
Like you, we are UK based business, who wants to charge in dollars. Wanting the flexibility of having our own merchant account, the better rates that should give, and the portability of your customers (and their card details) I first of all spoke to the banks. But some won't deal with startups without 2 years trading history (HSBC and LTSB for example). Some don't charge in anything other than GBP yet (Clydesdale). And some, such as Barclays, although they will charge in both USD and GBP want to charge exorbitant rates for USD transactions. (2 or 3 times typical GBP rates).
You also need to make sure your merchant bank support recurring transactions; not all do!
Setting up a merchant account can take weeks and a lot of paperwork and hassle. In the end, for competitive multi currency rates and simplicity we opened an account with PayPal Website Payments Pro. This took around 48 hours!
It also killed the requirement for a payment gateway, which reduces the cost and complexity again. The downside with PayPal is, I believe, that if we wanted to move in the future, our customers would have to re-key their payment details with our new provider.
Regardless of whether you are with PayPal, or a bank+PSP the next step is the recurring billing.
Putting together these three separate providers together can be a bit of a nightmare. Although most banks support most payment gateways, most recurring billing providers only support a minimal number of gateways.
If you are in the UK and want to use Chargify you have no choice but to use DPS Payment Express (an Australian company) and they in turn only work with HSBC or Barclays.
Recurly support (for the UK) Cybersource, SagePay and PayPal Website Payments Pro.
Spreedly supports more, but for some reason that I now can't remember I counted them out.
The thing about billing is that it quickly becomes pretty complex and the smaller providers have all got limitations which could, depending on your business model, cause problems. You can imagine that with however many customers they all have, there will be a lot of requests to them along the lines of "can you just add this... that would be great". It must be hard for these guys to keep up with such requests.
When you look at the recurring billing providers you may also need to look at whether they support multi currencies, and VAT.
That's all I can think of for now. Good luck!
As you you know we are in exactly the same position as you. We have spent far more hours than should be needed to get to the place we are now.
To get our merchant account (with one of the top 3 UK banks) took about 6 weeks. About 3 weeks was wasted with 'internal paperwork' that never got actioned. Another 1 week wasted on credit reference checks for the wrong person. I had to chase them every other day.
If you are a UK startup, please do not underestimate the importance of considering VAT within your project! We made the mistake of integrating one of the leading SaaS recurring payment providers when we did not have a requirement for VAT. Our business quickly grew and we reached the threshold for having to register for VAT. That's when we realised that our chosen supplier did not support VAT, and we would have a to build a lot of custom functionality to handle VAT correctly. We are now in the process of migrating to a new recurring payment provider as this works out more cost effective based on our own circumstances.
TOP TIPS FOR UK STARTUPS:
A) Allow at least 6-8 weeks for your merchant account to be setup. Be prepared to chase the bank every other day until it's finalised. They won't chase you. They will do a credit check on you. You need to have a business bank account already setup.
B) Consider the implications of becoming VAT Registered from the get go and how this will affect collecting and recording financial data. You can't charge VAT to people who are based outside of the UK, but once you are VAT registered you MUST charge VAT to all UK customers.
C) Think about your billing requirements long and hard. Do you need to issue invoices? What information legally needs to be on them to satisfy the HMRC? Do you need to issue email invoices, PDFs? Do the invoices need to be online for the user to download?
D) Choose your SaaS recurring payment provider wisely. Have a solid set of requirements before you start integrating. Play around with their free accounts and make sure that you have all bases covered. IT's going to be very hard to migrate providers when you have a lot of customer Credit Card data already collected. Make sure they have a defined process for moving your customer data from one supplier to the next.
E) To accept payments (not using PayPal) you will need: 1) a business bank account 2) a merchant account (barclays, LTSB, RBS are a good start) 3) a payment gateway that is accepted by your merchant account provider (SagePay (UK), PaymentExpress (AU)...) 4) a UK, VAT friendly PCI compliant SaaS recurring payment provider (Recurly, Chargify...)
We learnt a lot of lessons the hard the way, hope my comments save some of you time.
Thanks for considering us.
Most likely for us we'll use Recurly + SagePay + Elavon. Will end up costing about £60/mo in costs for our first few customers to pay by credit card but then its all worthwhile.
Why Recurly and not Chargify? Recurly stores CC data so if we want to change payment gateway we can. Recurly features VAT support and has a panel where customers can log in. Yes it doesn't look good when customers log into yourname.recurly.com. But what we plan to do is put this in an iframe, add an SSL cert to our site and using the auto login token from the Recurly API so a customer clicks on account and it looks like they're on our site. Custom CSS is all thats needed to make it blend in.
I would be very interested to hear what billing solutions other UK companies use that provide SaaS!
Anyone know of one?
