Web Hosting Talk : Web Hosting Main Forums : Running a Web Hosting Business : PayPal? How could a host provider use this service?

[JoeM]

We are a small new hosting firm and I just contacted PayPal, but I soon realized that we could not use them because there is no such thing as doing a pre-authorized monthly billing thing via credit card. And they do not give out, even your own customer IDs and credit card numbers so we would not be able to get them into our monthly billing system. So I guess we would have to chase down our hosted customers once a month and persuade them to re-fill in their sign-up form and make a payment?!?!

Are you using PayPal for your hosting service? If so, how is that working for you?

[CJB]

If you're just offering PayPal as an alternative method of payment for those who want to use it, I'd say treat it the same as checks. It's the responsibility of those who use that method of payment to get their payment to you on time; if they don't, suspend their account after a grace period until they pay up.

[cperciva]

Paypal has worked fine for us so far, but we work on a different business model from others. Since we allow customers to make payments whenever they like, in whatever amount they like, as long as their account balance remains positive (we keep track of their payments and deduct amounts based on their usage daily).

But I can see that for traditional webhosting companies Paypal's lack of recurring billing could be a problem. On the other hand, is it any harder to deal with than the complications and costs of handling credit cards?

[JoeM]

Good point. And interesting business model you've got there.

[AlaskanWolf]

Our other company uses PayPal as the only payment option. Its ideal if you offer hosting pre-paid a year in advance.

We moved the site from accepting credit cards to paypal only and as a matter of fact, there has not been any slow down in signups

[Fremont Servers]

How will Paypal handle it if there is a fraud order?

Someone goes to your site and pay via paypal. If that person uses a stolen credit card to order, wouldn't Paypal freeze your paypal account?

[cperciva]

Asia: sometimes yes they do freeze accounts if they think the account itself might be fraudulent -- if, for example, you created it yesterday and since then you've had two orders both with stolen credit cards, they'll (rightly) get suspicious. In all the cases I've heard of, sending documentation to Paypal to prove your identity has gotten accounts unfrozen.

[NMCB]

I believe reading somewhere on PayPal's site that your customers do not have to be deal with PayPal, meaning you take the order and then go to PayPal to process the credit or debit card charge. Thus, for recurring charges, this should not be a problem... unless it becomes a time consuming task.

[JoeM]

Yes thanks. The only problem with that is that we are already set up to process CCs in house. We were just looking for that "trusted", well recognized authority for receiving the payments on-line.

[David@Digisurge]

You may want to check out:

http://www.instabill.com
http://www.revecom.com

Both accept recurring orders.

[Jaiem]

Joe,

It's my understanding with PP the customer has to send payment to you. You can't charge them directly.

As for freezing accounts I've heard horror stories about accounts being frozen (receiver accounts) because someone sent them money on a fraud or stolen CC. PP isn't supposed to freeze the whole account but I've heard that it does happen.

[ksstudio]

We are using Revecom to accept cc payment for our web hosting business also.

http://www.revecom.com

They offer recurring billing and the control panel is cool.

[ADW]

Using a 3rd party processor may not be a great idea for web hosting, since you do not get to see the credit cards.
That would be a problem if you are trying to move out + the billing procedures will be pretty confusing as to who is getting denied and who isn't.

[paypaldamon]

Hi,

Accounts are rarely, if ever, frozen over a single transaction. There has to be some serious fraud flags for that to occur and we generally place the transaction in question in a pending status.

You may want to check out the subscription service that just launced.

Please feel free to ask me any questions.

[alchiba]

I've looked at the subscription service (i.e., recurring billing) and it seems like a big step in the right direction as far as hosts are concerned. And if I understand it correctly, we can even hand off variables to PayPal from our own payment page, thus enabling us to capture customer contact data.

My only two remaining concerns are: 1.) Is PayPal fully international and 2.) Customers get the feeling they have to "join" something in order to pay a bill, therefore it seems a bit. . . unprofessional.