For the many smaller pay sites looking for alternative revenue streams in the light of the recent VISA / MC credit card processing regulation changes, and more established players seeking to further broaden their processing options while increasing their stability and long-term operating viability, one option considered for a variety of reasons is PayPal. Let’s take a closer look:
As part of my series on the ongoing changes in the payment processing arena, I will be looking at a wide variety of current alternatives to using ‘The Big Three’ for the conversion of surfers into customers; and while I personally believe that for the majority of adult pay sites, using the likes of Epoch, ibill, or CC Bill may still remain ‘the best’ option – it is clear that "one size does not fit all…" and into this arena strides an interesting option, and one that currently makes no mention of fees and regulatory changes.
While question of how PayPal will deal with VISA’s evolving regulations remains uncertain to me, since I have heard nothing about these changes from them, nor seen any relevant mention of new changes in their Web site’s ‘Policies’ section, it is quite clear that there is a strong possibility that ANY acceptance of VISA credit cards for online sales transactions – regardless of the intermediary processor – will incur additional informational reporting and financial burdens for merchants. In other words, as a means of avoiding the near immediate and ongoing costs of ‘sponsor registration,’ PayPal may not be the solution.
According to a recent article, “A PayPal spokesperson told AVN Online via email that the new regulations apply equally to all IPSPs, and therefore they apply to PayPal as well. The spokesperson noted that while other billers are dropping processing for non-U.S. businesses, PayPal will continue to process for merchants in the U.S. and worldwide.” This news came to me after I had already signed up for the service, and with my understanding of the new regulations, processing VISA transactions through a PayPal account may also cost a fair chunk of change in the near future.
Still, I was anxious to learn more about PayPal, and the reasons I liked it increased with my use of the system’s backend, which includes a helpful “Developers” section. Here’s where I left off:
Verified and Vexed
According to PayPal’s site “PayPal Subscriptions lets you accept recurring payments for your service. Your subscribers will be able to subscribe quickly and securely from PayPal hosted payment pages where they can make initial payments (if necessary) and set up any future payments for the subscription.” This was what we needed to implement as a payment option for Dawn’s Amateur site – a perfect test bed for this project and for the implementation of a new membership system to replace ibill’s password management system that she once used on her old pay site.
Although their account verification process (in which PayPal made two deposits to my business checking account to verify that I had access to it) took only a few days to complete, getting the system up and running on my wife’s site was a little more troublesome for me than I had really hoped it would be.
This should not be surprising, as I am definitely not a programmer, and since my goal with this series is to demonstrate how a paid-subscription site can still *currently* be started – or continued – without spending any ‘out of pocket’ money for transaction processing, I did not want to use one of the few reasonably priced ‘commercial’ subscription management solutions listed on the PayPal site’s ‘Developer‘ section, and so instead opted for their basic (and FREE) Perl script, and ‘rolled my sleeves up.’ Subscription management systems come in many forms, and can become quite elaborate and comprehensive...
While not technically *necessary* for the operation of a pay site, or for the processing of transactions, having a subscription management system allows for you to (on its simplest level) accept and process transactions, automatically assign passwords and user names, re-bill recurring subscriptions (if necessary), delete expired user names and passwords from the user database, and handle the authorization of visitors to your site’s “protected member’s area” without ’human’ intervention. Why perform such tedious functions manually, when they can be easily automated for efficiency and timeliness?
Subscription management systems come in many forms, and can become quite elaborate and comprehensive, including flexible client e-mailing options, customer service tools, and even affiliate revenue sharing features. The basic tool provided by PayPal is a Perl script that interacts with their IPN (Instant Payment Notification) system, and simple Apache .htaccess / .htpassword authentication for protected directory access. While there are several promising 3d party solutions that provide a variety of advanced features, this ‘in house’ solution has so far proved adequate for the job of running a small pay site, but there’s a catch:
As I said earlier, I am not a programmer, and the .pdf installation documents (while thorough) target a more technically savvy user with command line telnet access and a greater degree of control than those of us who market virtually-hosted Web sites typically enjoy. Relatively cryptic techno-babble and the ignorance of an ISP’s “Technical Support” staff can render the ‘easy’ script installation process a living nightmare for the inexperienced and over-ambitious. I myself invented several new ‘foul words’ during this ‘simple’ process, but also learned much in doing so – some of which I’ll share with you next time…
At this point, while I have barely scratched the surface of the benefits (and potential drawbacks) of using PayPal for processing recurring Web site membership fees, I have been impressed with the wide variety of unique options available from their service, and I am now certain that there will be a place for PayPal in our various operations; especially since their tightening integration with Ebay makes them an even more attractive option for our non-adult ventures. Of course, this story will be continued… ~ Stephen
