Version 1.7.0 brings a brand new feature to Chargify: Taxes!
The ability to define taxes in Chargify is something that many of you, especially those in the EU, have been asking for awhile.
Check out the documentation here: http://docs.chargify.com/taxes
As always, If you have any questions, give us a shout on twitter (@chargify /cc @npverni).
Shifting Tides Reveal Opportunity
Having been in the web design industry since 1995, Matt Certo, co-founder of WebSolvers (a 12 person Orlando web design firm), has seen the technology landscape evolve dramatically. Back in the early days of his company, most Websites were built from scratch using Notepad. If a WebSolvers client wanted a website, it was built in pure HTML and content update requests were sent via Fax machine.
As time went on, content management systems, dynamic Web applications, and API feeds broadened the landscape dramatically. Clients wanted it faster, cheaper, and more powerful than ever. As Certo explains it, “we began to see a portion of our prospects asking for the functionality of a $25,000 Website with only a $2,500 budget. They needed the time of our best folks, but were turning to less expensive alternatives and settling for a lesser result.” As it turned out, that was both a problem and an opportunity.
Conceiving a Product
Among all of those shifts, Certo and the team at WebSolvers saw an opportunity to build a product. “We wanted to figure out a way to meet that client need in a way that made financial sense for them and us,” he explains. They crafted Consulto, a Web design platform for professional firms (i.e. law firms, accounting firms, and general consultants), the segment of clients with which they had experienced this common set of demands.
Backing up your data is real easy to do, so you should never need to curse the day when you decided to leave early instead of save your files. But eventually your system probably will crash, and you most likely will end up cursing that day.
Having backed up your data in the cloud (where it can be accessed from any device whenever you need it) could be the silver lining on that fateful day when you get the blue screen of death.
1. Dropbox
Dropbox is an easy and quick way to store, sync, and share important documents or presentations that you’ll want to keep safe and portable. It’s cross platform and works on basically any smartphone. You get 2GB free but can upgrade to 50GB for $10/month and 100GB for $20/month. To store a file, just drag and drop it (or a copy to backup) into your virtual Dropbox directory. Access it whenever, wherever. You can install Dropbox on an unlimited number of devices to see and edit your files. Only the changed parts are synced, so your Internet doesn’t slow down.
2. Mozy Pro
This backup solution is meant for storing and syncing your data only. Mozy Pro also offers businesses the possibility of backing up their computers and servers, but each unit will need its own license. One desktop licenses is $3.95/month plus $0.50/GB per month, while a server licenses comes out to $6.95/month plus $0.50/GB per month. You can schedule automatic backups on a daily, weekly, or monthly basis. Custom settings let you choose how much bandwidth to use as and which files, or sets of files, to backup.
3. Jungle Disk
Jungle Disk is kind of like a combination Dropbox and Mozy Pro, but with a more complex pricing plan. The Workgroup Edition for sharing, syncing, and backing up your data for groups of two to 100 costs $4 per user/month plus storage fees, while the Server Edition provides Windows- and Linux-based server backup solutions for $5 per server/month plus storage fees. Both editions have unlimited storage space where you only pay for what you use.
If you can pay for a 95¢ pack of gum with your credit card, then you should be able to use your card for that antique mahogany desk at the craft fair! The new smartphone card readers, aside from looking super cool, are also highly functional. Being able to accept credit cards anywhere at any time, regardless of whether you have a brick and mortar store, or are a local artist, can dramatically increase your sales and streamline your invoice process as well.
While there are probably around a hundred card processing apps available for different smartphones (iPhones win out here), only a small number of companies have joined an app to a specific card swiping device. See how they all compare before you decide which one is best for your business.
Square
Perhaps the smallest card reader on the market, Square is also one of the most easily recognizable devices. About the size of a book of matches, Square plugs directly into the audio jack and can be used on most iPhones or Android phones. Both the device and app are free, and no contract or merchant account is required, so money goes straight into your bank account.
It looks sleek, is easy to use, and allows you to make refunds easily. Square’s pricing plan is equally as simple. For every card swipe, Square takes 2.75%. However, non-swipe transactions incur a fee of 3.5% plus 15¢.
There are tons of other non-swipe card processing apps for the iPhone. Some of these are: Pocket Terminal (can handle multiple business accounts), iPay POS (compatible with dozens of the most popular payment gateways), ProcessAway (recurring billing), SWIPE (cheap app with lots of features), and many more.
Intuit GoPayment
Intuit GoPayment is similar to Square but with two distinct differences. While Square only works with Apple and Android products, Intuit GoPayment is also compatible with BlackBerry devices (Note: only the app, not the card swiper). This service also gives larger businesses the option of signing up for a $13 monthly plan with reduced transaction fees of 1.7% (swiped) and 2.7% (non-swiped). The app and card reader are free, and money is deposited right into your bank account.
Reel.com founder and serial entrepreneur, Stuart Skorman, and longtime business owner John Muller, who had a Hoboken street named after him for his longevity, have at least one thing in common: they are bound by the necessity of billing clients and customers and waiting for payment. Whether you’re on your fifth successful startup, or just beginning your journey, the process of invoicing and collecting payments can often prove as difficult as getting the work accomplished. Balancing the client relationship and the need for payment begins with understanding the nature and organization of accounts receivable.
Entrepreneur.com defines accounts receivable as, “the money due from all customers for merchandise or services delivered on credit.” Management of this amount, shown as an asset on your company’s balance sheet, can make or break your company. Methods for managing accounts receivable differ as widely as business types; however, processes should achieve three objectives:
Setting up your accounts receivable process should encompass these significant issues:
Credit policies: Establish a credit policy and stick to it. Define the conditions under which you will extend credit, how much credit you’ll give, and to whom. Choose your preferred methods of payment, how you will determine credit worthiness for new customers, requirements for deposits, and interest charges on late accounts.
Last year, fraud costs businesses $8 billion. If your business accepts credit cards for payment, then you’re vulnerable to chargebacks caused by these fraudulent transactions. Setting up a fraud scoring system can help stop fraud before it starts, and save you time and money down the road.
Fraud scoring is a set of operating procedures and technologies that are implemented to identify suspicious transactions. If a purchase looks like it may be fraudulent, the system can detect it and either reject it altogether, or request additional authentication before the transaction is processed.
Good fraud scoring systems will measure the risk of the transaction by gathering and analyzing relevant information about the purchaser, including: the amount of the purchase, the IP address from which the transaction was made, the email address of the purchaser (free emails may be particularly worrisome), where the purchase is being made from, when the order is placed and what shipping options the purchaser is using.
After your fraud scoring system is setup, it’s important to tweak it as needed. Fraud is more prevalent in some businesses than others and you’ll need to adjust your system accordingly. Ideally, this is done through a fraud score, which takes a broad range of indicators and creates a single metric by which to judge the riskiness of a transaction.
The prospect of setting up a custom fraud scoring solution can be daunting, to say the least. Fortunately, there are many off the shelf solutions, like MaxMind, which are far more cost effective for small businesses.
One of the biggest drawbacks of running a service based business is that you only get paid for billable hours. After spending hours looking for clients and doing preliminary work, you only get paid for what you do. Whether you bill at $20, $50 or $200 an hour, your income is limited to the amount of hours you work. If you are smart, you can find a way to turn your services into products and make more money without having to work 80 hours a week.
If you offer a set of services that you feel you aren’t getting paid enough for but can’t justify raising your hourly rate, productizing may be your best option. You can offer your services as a package, with clear objectives and promises attached. The package could include a combination of several services you provide to make it look more appealing.
This is a strategy that many web-designers use. They offer a package that may include a specified number of pages, logo design, domain name registration and SEO marketing. Customers read these packages and feel like they are getting a great deal. But from your perspective, you may be making $75 an hour instead of $25. Your hourly rate will increase even further as you become more efficient.
The key to productizing services is to learn to work efficiently. Here are some tips:
Many entrepreneurs offer free products to help increase their customer base and encourage consumers to buy a premium product. Called “freemium,” these free products may sound like a good marketing strategy, but it may not be entirely effective.
Here are some reasons why freemium may not be the best marketing tool:
Pricing products either online or in a store can be difficult to determine because most items have a set manufacturing overhead cost. Retailers need to find a balance so they don’t have too few customers due to overpricing or too little profit if they price their margins too low. Much of pricing boils down to trial and error, but a systematic and informed approach to those trials can help you find the “sweet spot” with a minimum of mistakes.
At the “10,000 foot view,” there are two ways to approach pricing. You can price your products according to how much profit you want to make, or you can price them according to what the market looks like.
Profit-Based Pricing
If you have 2,000 shirts that cost you $10 each and you need to make $24,000, profit-based pricing says to charge $12 per shirt. This assumes the $10 accounts for all of your expenses, not just the price of the shirt. This sort of strategic planning helps keep track of the bottom line, but sometimes the plan doesn’t mesh well with realities.
For new startups, cash flow is king. And the way a company chooses to bill its customers will directly impact revenue streams needed to adequately maintain cash flow and business operations. For businesses that naturally lend themselves to a recurring billing model, the question is, what’s the optimal billing period?
Whether you decide to bill on a longer or a shorter period depends heavily on your product and business model. Here’s a quick run-down on two common billing approaches:
Annual Payment Plans
Monthly Payment Plans
Because startups are new and unproven from the market’s perspective, business managers will need to evaluate how skeptical the market will be of the product or service being offered. If a company is introducing a brand new concept, it may be in its best interest to offer less risk to customers upfront through monthly payment plan options. Using this billing method, cash flow will need to be addressed on the front-end to ensure that business operations can be successfully managed.
In January 2011, the National Retail Federation, the world’s largest retail trade organization, along with First Data Corporation released results from its latest research study. The information collected from the subjects involved evaluated the data security and fraud prevention strategies practiced at small to mid-sized retailers. In addition to shedding some light on the industry’s current standards, this study also identified many areas of opportunity.
Despite some favorable data, a majority of retailers demonstrated an apparent lack of understanding with regard to the specific types of liability that they could be held accountable for in the event of a data security breach. In fact, an alarming 35% of retailers did not know that they are required by the state to notify credit cardholders through their banks if the information listed on the customer’s credit or debit card was compromised. Disregarding policies like these leaves consumers in the dark when it comes to the security and protection of their personal information.
There are a number of ways that consumers can protect themselves from billing security perils. Here are a few things to consider before trusting a bank or financial institution with your private data:
Providing an online method of payment for your customers is only part of an effective billing process. A major online billing myth is the belief that individual payment gateways serve the same purpose as an integrated customer billing system. Online billing systems work as customer management tools. They provide a flexible suite of business intelligence and analytics tools alongside communication and marketing structures that assist financial management and plan development. In short, online billing systems help you keep your business profitable.
Are these additional myths keeping you from retaining more of your customers and revenues?
“Our company can’t afford an online billing system.”
Begin to scrutinize and compare the costs of printing, labor, technology, supplies and postage and you will quickly recognize the steep costs associated with managing billing internally. Managing your own invoicing is time-consuming and expensive; it generates real and opportunity costs. Careful data entry and tracking is critical in managing business cash flow, but that time is best spent focusing on operations. Small business owners and executives must spend their time perfecting products and services, not on billing and collections. Compound the loss of time with errors in the invoicing process and the result is even more time and money lost - financial and opportunity detriments potentially devastating to a company.
The savings realized in mailing costs, with the additional benefits of receiving payments on an accelerated schedule, faster processing of funds and staying technologically relevant makes the adoption of online billing not only affordable, but necessary.
“We can handle our online billing in-house.”
Minimizing billing as a basic company utility rather than a strategic opportunity to develop and retain your customer base is a mistake most businesses cannot afford to make. The bill presentment and payment process plays a major role in efficacy, cash management and profitability. Technological and systematic best practices in the billing industry change often.
Unless your startup is supported entirely by advertising, you need (or will eventually need) a billing system: a way to securely and efficiently accept payment from your customers. The only question is: build it or buy it? Unfortunately, there is no “one size fits all” answer to this question - the choice is entirely dependent on your own unique circumstances. If you aren’t sure which way to go, assess where your startup stands on the following issues:
Time Sensitivity
The first factor affecting whether to build or buy a billing system is time sensitivity. Do you need a billing system immediately? How about in the next 30-60 days? If so, it probably makes more sense to buy, as your short time horizon will not be tolerant of mistakes or project setbacks. A few extra weeks of development time (which is quite common in software development) could be ruinous to your business if you need a billing system right away.
The less urgency there is, the more it potentially makes sense to build instead of buy. Delays and obstacles in the development process (though certainly frustrating) will not drag your business under.
Unique Sales Process
Some companies create an in-house billing system to save money. Others, meanwhile, have special requirements that ready-made tools won’t support. Maybe it’s an extra form field, maybe it’s a tie-in with your company’s proprietary database, maybe it’s a high level of encryption - it could be anything. If a feature you want or need is not available in existing billing services, building your own becomes attractive, if not an outright necessity.
On the other hand, if another company has already gone through the trouble of creating a billing system that does exactly what you need it to, why re-invent the wheel by creating a brand new one from scratch?
At Chargify, we are pretty active on Twitter and see a lot of tweets looking for recommendations on which recurring billing application to go with. Whether it’s about Chargify, or our competitors, people turn to the Twitterverse for advice on which application is best for their business.
Back when we started, Chargify was one of a few recurring billing applications. Now-a-days there are quite a few to choose from, so how do you decide if Chargify is right for you? While you wait for the Twitterverse to respond to your tweet, you could check out some of our competitor pages:
Or, you could just ask us! We are always happy to answer any questions you may have about us or how we compare to other billing applications out there. Tweet at us, write on our Facebook wall, or leave a comment here!
Outsourcing is one of the least-discussed weapons of successful businesses. Whether it’s literally outsourcing a job to another country or simply delegating it to someone else in America, business owners who clear the unimportant from their plates are free to focus on what really matters. As a result, their businesses enjoy steady growth instead of being suffocated by unpleasant chores and busywork. Here’s how you can do the same:
Embrace the Outsourcing Mentality
A jack of all trades is a master of none. It’s an old saying, and one that many entrepreneurs would do well to remember. Unfortunately, there is often a resistance to outsourcing in the business world. The prevailing attitude seems to be “why should I pay someone else to do what I can easily do myself?” It sounds logical, but it actually isn’t.
The reason it makes sense to outsource tasks as a business owner is the same reason you probably don’t change the oil in your car. Someone else can do it better, more quickly or for less money. Outsourcing is your friend, not something to resent or avoid. As an entrepreneur, you should actively and zealously look for ways to get things done through others. The only exceptions are your core competencies - the thing(s) your business does better than anyone else.
Hire an Assistant
Outsourcing doesn’t necessarily mean hiring foreign workers (although it certainly can take this form.) You can get started with outsourcing by just hiring an assistant. It can be an in-person assistant who works with you in your office, or a virtual assistant who completes tasks from abroad.
Before starting your search, nail down some specific chores you’d like to unload on them. Anything low-value, repetitive or personally unsatisfying will do: invoice processing, task scheduling, follow-up, etc. For best results, create written procedures that specify exactly how to do the tasks you’re outsourcing. Fine-tune and refine these procedures over time.
As part of our new customer spotlight series, we will be featuring Chargify customers who we think deserve to have the spotlight on them for the day. This series is our way of giving back and saying thank you to all of our customers. Stay tuned for more customer spotlights each month.
In this month’s customer spotlight we are featuring Commendable Kids. Commendable Kids was our runner up in the “Chargify: Most Potential to Monetize” challenge at the Rails Rumble back in October.
Commendable Kids is the result of a weekend long web application development competition in which teams had 48 hours to design, develop, and deploy the best web property they could using Ruby and Rails. Now, 5 months later, Commendable Kids is still around and doing great things.
What is Commendable Kids?
Commendable Kids was designed to allow parents, grandparents, teachers and others to encourage, motivate and reward young children through the use of badges. With Commendable Kids, you can register a child so that they can start receiving badges for their hard work, goals achieved, skill developments, and milestones, basically anything you think a child deserves recognition for! There are over 90 badges to choose from.
You can even invite others such as friends, family members, and teachers to participate. By becoming a fan of the child, others can encourage and high five (virtually of course) the children for their hard work and accomplishments.
Wouldn’t it be nice to be able to access your data from anywhere and anytime? Cloud computing makes this possible, and is particularly helpful for start-ups and small businesses seeking on-demand computation to change their IT cost structure and improve their bottom line. Let’s take a look at why it’s good to be in the clouds.
To see the full infographic, click here.
A lot of great companies are teaming up with Chargify to make our product even better, and to give our merchants even more flexibility with their apps and billing systems. Check out all of our third party integrations below, and be sure to check our Partner Ecosystem page, as the list keeps growing!
Zferral
A few weeks ago, we teamed up with Zferral, which allows Chargify customers to easily create affiliate programs for recurring payment applications with ease. Chargify makes the recurring billing of their customers easy and Zferral does the same for affiliate management and payments.
With this integration, Chargify reports on revenue for signups and renewals. This integration also eliminates the time and effort required to operate an affiliate program, and makes it extremely simple to reward the people referring others to your services.
Formstack
Last August, Formstack announced that it had switched its billing system from something they had built themselves to Chargify. Chargify’s integration with Formstack provides a seamless way for businesses to manage recurring payments from their customers.
Formstack users can now use Chargify with a Formstack web form to create recurring online payments, collect membership and subscription payments, and even accept coupons.
Over the past few months, we have been working really hard to make Chargify an even better product by enhancing the product as a whole as well as the current features and adding new features based on our customer’s feedback and recommendations.
What Have We Been Working On?
Coupon Enhancements
Our most recent improvement was to our coupon feature. Thanks to your feedback on ways to improve our coupon functionality, we have released 3 new coupon features. There is now a recurring coupons feature, remaining credit feature, and the ability to delay application of a coupon until after the free trial ends.
The recurring coupon feature allows you to configure coupons to continue to apply after the initial signup and gives you the ability to have a coupon recur indefinitely or for a fixed period of time. The remaining credit feature allows your customers to use a coupon that is greater than what their subscription costs and as a result have a credit towards their next payment.
Statements are a great way for both you and your customers to see a line-item breakdown of the charges, payments, credits, and activity for a subscription account on a period-by-period basis. We “pre-released” this feature 2 weeks ago and on Friday we finalized that release.
For any subscription, you can switch to the Statements view and then page between the usage periods for an at-a-glance view of everything that has affected the subscription balance. This is really handy when reviewing someone’s account history.
What’s really great is that you can also share these Statements with the customer via email. If you select the option, Chargify will automatically send out a pretty, HTML-formatted email to the customer when their statement period closes. You guys have been asking for line-item ability on receipts for a while, and this is our solution for that. Statements can completely replace your existing receipts, but they can also be used in conjunction if you choose.
Today’s entrepreneurs face an important choice: to bill customers online or offline? To the brand new start up focused solely on product development, it may seem like a waste of time to think about billing at all just yet. However, as all entrepreneurs discover, it’s ultimately all about getting customers to pay you. We believe a wisely implemented online billing strategy will make this process easier for the following reasons:
Simple Setup
A common objection entrepreneurs have to online billing is that they believe it’s a huge hassle. This idea stems from the brick-and-mortar world, where a new convenience store or restaurant has to buy expensive machinery to process credit card orders. Knowing this, many entrepreneurs assume the same types of headaches are involved in online billing and refuse to look into it any further.
But truth is, in 2011, online billing is a breeze. Provided you have a merchant account and a payment gateway, services like Chargify can literally have you up and running with the ability to bill customers online in one day. The entire setup process is five steps long and can be completed by anyone with a modicum of business and technology skills.
Yes, Chargify gives you the ability to upgrade or downgrade a customer’s subscription in the middle of a billing period and collect prorated charges or give prorates credits.
What happens when I upgrade or downgrade a customer’s subscription?
How Do I Initiate an Upgrade or Downgrade?
When in the admin interface, click the subscriptions tab and then click the “upgrade/downgrade” link under the subscription options section. This can also be done when viewing a subscription by selecting the “upgrade/downgrade” link under the summary section on the left of the screen.
We recently added the capability to export information from your Chargify account into a .CSV file. You can export from the following tabs:
Simply login to your account, go to your account dashboard and select one of the tabs. You will now see the “Export” link.
Sort by product ID, email address, account creation date and more.
Have questions? Feel free to visit the support section or find us on Twitter @chargify.
As promised, here is our post on the ins and outs of coupons within Chargify. Many merchants seem to be confused about when you can and can’t use a coupon. With Chargify, you can create one-time coupons to give your customers a discount at signup. Currently, coupons can only be used during the initial creation of the subscription and cannot be used during or to extend a free trial period. After the coupon is applied, customers will be charged the normal amount at the next assessment.
Types of coupons
Chargify allows you to create two types of coupons: amount coupons and percentage coupons. An amount coupon gives your customer a flat dollar amount discount while a percentage coupon gives your customer a discount equal to a specified percentage of the product’s base price.
If you haven’t noticed yet, Chargify Dunning strategies just got a whole lot more customizable! Our latest release gives you more control over how long failed renewals are retried, and what action to take at every step along the way.
How it used to be…
The old Chargify dunning strategies lacked the ability to truly customize when customer communications were sent. Either you had us send the dunning emails or you didn’t. Either way, failed renewals would trigger retries for either 14 or 21 days, at which point the subscription would always be automatically canceled if no successful payment was made.
The new way…
You decide! We’ve renamed the Settings tab for Dunning to “Retries and Dunning” and broken the configuration into two logical sections: Retries and Final Action and Dunning.
Chargify allows you to create one-time coupons to give customers a discount on signup. After the coupon is applied, customers will be charged the normal amount at the next assessment.
Currently, coupons can only be used during the initial creation of the subscription and cannot be used during or to extend the free trial period. However, you can extend their free trial period by changing the assessment date for their current subscription.
To change the assessment date for a customer’s current subscription, find the subscription that you want to extend then:
Get feedback. Discuss financing. Ask questions.
*Note From the Chargify Team* - If you can find an hour, we can’t stress enough how valuable we feel this experience could be. Sramana is an experienced serial entrepreneur and her direct feedback could help you move your business in a more profitable direction (or even just make you think about something you may have overlooked). She has been kind enough to volunteer not only her time, but her “rolodex” as well. It is not often you come across opportunities like this one, seize it.
Together with Sramana Mitra of One Million by One Million, we’re offering Chargify customers the chance to attend a FREE online strategy roundtable for entrepreneurs interested in discussing positioning, financing, and other aspects of a startup venture.
Get harsh, honest feedback from someone who has exited multiple companies, is an angel investor, and has a ton of connections.
About the Event
This is an extremely rare and exciting opportunity for startups & we encourage our customers to take advantage of it.
When: January 20th, 2010
Time: 11am EST/ 8am PST
Register: http://strategyroundtable-jan20.eventbrite.com/
Yes, Chargify supports a metered billing pricing model. Chargify gives you the ability to charge for your product on a per-usage basis.
For metered components, you tell us every time one of your customers uses some unit or units of your “widget”. The usage of these metered components will be tallied throughout the billing cycle and the charge is seamlessly integrated as a line item on your customers’ next invoice.
At the end of the billing period, Chargify will bill your customer for the total number of widgets used, and then we will reset the widget count to zero and the whole process starts over for the new billing period.
Last week’s top support question was, “Can old customers stay on old pricing if the merchant changes their product prices?”
In short, the answer is yes, old customers will always stay on old pricing, even if you change the product pricing. Although the short answer is simple, there are a few more things we would like to address in this post that we think are important for you to be aware of, as they relate to merchants changing their product pricing.
Will my customer’s next subscription fee be at the new price?
When you change the pricing of your product, your current customers will continue to be charged the old price unless you move them to the new “product” (new price level). New subscribers, after the price change, will be charged the new price. This is called product versions, when you have the same product just at different prices.
Do customers need to approve the new price?
Yes, since you would have to move them from the old product (old price) to the new product (new price), you would need to get your customer’s approval and then move them via the API or the administrator interface.
Responsible merchants work hard to prevent chargebacks and fraudulent charges year-round. However, you should be even more vigilant during the holiday season. Due to the glut of shopping activity, professional con artists assume (correctly, in many cases) that their schemes will go undetected. The stress of the holidays can also frustrate legitimate customers and lead them to charge back their purchases. By implementing a few key safeguards, merchants can dramatically lower chargebacks and fraudulent charges this holiday season.
Ship Quickly
One thing that direct marketers (including infomercial promoters) learned long ago is that how quickly someone receives their product has a lot to do with what your return/chargeback rate is. Think about it: many, though not all, of the purchases people make are impulse-driven. They were sold by an ad, or a product grabbed their attention from a website. After placing such an order, some customers get second thoughts and rush to submit a chargeback.
If your product takes 6-8 weeks to ship, you are giving customers plenty of time to make this decision. But if you ship immediately and they get their hands on it in two or three days, the urge to chargeback is less powerful. In some cases, quick shipping really is the answer.
Where Can I Get Someone to Help With My Chargify Integration, API Work and Programming?
Last week’s top support question was, “Where can I get someone to help with my Chargify integration, API work, and programming?” The answer to this question is simple.
If you are unable to implement Chargify yourself, we have put together a list of consultants who have done work for other Chargify merchants. They are all independent contractors and are located around the United States and Canada. You can find a list of consultants, their specialty, and notes about each contractor to help with your decision at http://Chargify.com/Consultants. We only include consultants we know & trust.
We’re making a small change to the Chargify API and we wanted you to know about it. If you use the API to pull Transactions or create Credits, then you’ll want to read on to see what’s changing. If you don’t do either of these things, you shouldn’t need to change anything. Here are the details of the change and the new functionality that’s coming with it:
What’s Changing
We are changing the way Chargify “Credit” Transactions work behind the scenes. Today, Credits deduct an amount from a Subscription’s balance, but are represented with a positive “amount”. For example:
Old Subscription Balance: $40
Applied Credit Amount: $30
————————————————
New Subscription Balance: $10
Since it would be nice to also adjust the balance up in some cases, we’re introducing Adjustments. Adjustments with positive amounts make the balance go up, Adjustments with negative amounts make the balance go down (like Credits).
Old Subscription Balance: $40
Applied Adjustment 1: -$30
Applied Adjustment 2: $ 5
————————————————
New Subscription Balance: $15
Internally, we’re converting all existing Credits to Adjustments.
This past week our top support question was, “What is a free customer?” Chargify’s pricing plans are based off of the amount of paying customers you have, so it is important to understand the difference between a paying customer and a free customer, as it affects the amount we charge you each month.
What constitutes a free customer?
A free customer is one that has not paid you for the current month we are billing for. A common point of confusion on this is when someone pays you once a year for a subscription. If you charge a customer’s card once a year, they are not considered a free customer for the other 11 months they are not billed because they have already paid you for those months.
What constitutes a paying customer?
A paying customer is one of your users who paid you for the month that we’re billing you. If you charge your customer $10/month, every month, then we’re going to count them in your paying customer count each month that we bill you. If you charge them once, for a whole year, we’re still going to count them in your paid customer count each month, because they paid you for those months.
Since 2006, more and more small business owners have been focusing on PCI compliance. If your business accepts credit card payments, you need to be concerned about it, too. In addition to there being penalties for non-compliance, there are actually sound, common-sense, self-interested reasons to comply voluntarily.
However, like many new requirements, there is plenty of confusion surrounding this one. That’s why today, we’re taking a few moments to explain the basics of what PCI compliance is and what small business owners need to know.
What Is PCI All About?
Also known by its full name of Payment Card Industry Data Security Standard (or PCI DSS), PCI is simply a series of requirements mandating that all merchants process, store and transmit credit card data within a secure environment. It applies to any business that possesses a Merchant ID.
The initiative was launched in September 2006 to help strengthen account security throughout each step of the credit card transaction process. The PCI DSS is managed by an independent body called PCI SSC which consists of representative from major card brands like Visa, MasterCard, AMEX and Discover.
As PracticalCommerce.com explains, PCI compliance requires your business to:
This past week our top support questions was, “What is a merchant account and payment gateway and how do they work with Chargify?” This is a great question and it is important for Chargify customers to understand what they are and how they work together with Chargify.
What is a merchant account?
A merchant account is a type of bank account that enables businesses to accept payment by debit or credit cards. A merchant account is necessary because it’s what allows you to accept recurring credit card payments from your customers. Before you can even begin using Chargify, you will need to set up a merchant account. (You can however test Chargify without having a live merchant account/payment gateway with the developer plan.)
What is a payment gateway?
In order to get paid, you will need a payment gateway. A payment gateway facilitates the secure transfer of information between your website and your merchant account. Your payment gateway will transmit your customers’ billing information to your merchant bank so that payments can be deposited into your internet merchant account each month.
As of today, all Chargify accounts affected by the pricing change have officially moved and any account previously in dunning, has been canceled. For those merchants with a live site but no customers who chose to cancel, you can open your account again at any time and your balance will be set at $0.
We want to thank everyone for their understanding during this price change and if you have any questions, please feel free to reach out to us 24/7 at 800-401-2414 or on Twitter @chargify.
Since last week was Thanksgiving, the volume of questions that came into our support center was low. We figured for this week instead of doing a top support question, we would do an overview of our hosted pages to address some questions that we have been receiving over the past few weeks.
What are hosted pages?
Chargify offers a hosted/white label signup page for all of our customers. The hosted page allows you to integrate with the Chargify platform without having to worry about collecting credit card information or writing custom code yourself. You can point your customers to a unique URL on the Chargify site and we will securely handle subscription signup and payment processing.
Customizing your hosted pages
Chargify allows you to customize these hosted pages so that they are company specific and meet your individual company’s needs. You can customize:
Last week, we officially changed the Chargify pricing. With these changes, more merchants were required to update their credit card information or put a credit card on file. This resulted in last week’s top support question, “Why is my credit card getting declined?”
Answer: It can take Chargify up to 12 hours to update a merchant’s card on their account and until that time merchants may still receive messages in regards to their declined credit card.
There are two ways to resolve this issue, one better than the other.
There are a number of causes that can result in your customers’ credit card charges not being successful. Some of these causes start with your customer, with their bank, with your payment gateway/merchant account, or with your payment gateway settings in Chargify.
Here’s a brief summary of areas where a failure can occur:
Customer-Specific Problems
Not only could your customer’s credit card be expired or over its limit, but also your customer may have given the wrong billing address or zip code, or there may even be a fraud alert on their card for some reason.
Always try more than one credit card (like some of your own) so you can narrow down where the problem is really located.
Last week, we had some customers wondering if they could track billing data for multiple companies using Chargify.
Yes, you can.
Chargify was created by our team at Grasshopper Group because we needed a recurring billing system for our subscription-based businesses. When developing Chargify we had our customers’ same challenge in mind, to make sure we could use it to track billing for all of the Grasshopper Group businesses. That’s why, if you have more than one company, you can use Chargify to bill customers for all of them – and keep the accounting separate.
Chargify gives you two options - to build out the accounts separately as multiple sites or to build out the accounts as one site with multiple product families.
As we announced a few weeks ago, we’re currently in the process of changing our pricing here at Chargify (you can read the blog posts from our founders here and here). We wanted to remind you that come midnight tonight, all price changes will become official.
How will this affect you?
Chargify will automatically transition merchants based on your site status and customer count. If you have already transitioned your account, you will not be affected. Below, we have broken down the transition by merchant segments:
Every Monday, from this week on, we will be writing a post answering the top support questions from the previous week. Last week, we had a lot of questions come in from our customers wondering what happens when they hit their plan threshold. This is a great question and we thought it would be beneficial to share this information with all of you.
There is no need to ever worry about exceeding the allotted amount of customers on your plan; your customers will never be rejected. Regardless of the plan you’re on, we make it easy for you to upgrade. In fact, we will do it automatically and notify you beforehand.
At Chargify, our goal is to help your business grow; we would never want to stop a signup! That’s why we can assure you that the transition to the next level plan is seamless and that neither your account nor your customers will be affected!
Chargebacks are a big problem with consumers and merchants where many accounts of fraudulent chargebacks lead to costly fees and fines.
Check out the infographic below to see just how chargebacks can affect merchants.
Chargify recently sponsored a challenge, “Chargify: Most Potential to Monetize”, in the Rails Rumble event on October 16th through the 17th. This event takes place over a 48 hour time span in which teams have to design, develop, and deploy their best attempt at a web property, given the time restraints, using Ruby and Rails.
After looking over the 36 entries for our challenge at the Rails Rumble event, we have finally come to a decision. It was a team effort to decide on the winner for our challenge. After going through all of the entries, we had each member of the Chargify team share their top pick on which entry they thought was most likely to monetize with billing. It came down to two entries andWORKRZ came out on top as the winner.
Grasshopper Group has teamed up with BostInnovation to bring you the Spreadable Startup Series. Our goal is to help startups, like you, get more press for your company by helping you tell your story.
“We have partnered with BostInnovation to create the Spreadable Startup Series because we’re both passionate about entrepreneurship and know how important “buzz” can be…” Each week a company will be chosen and featured on the BostInnovation site. To be considered, all you have to do is apply and tell us your story.
The requirements are simple:
1. You must have something to showcase (product, working site etc.)
2. Your company must have less than $2 million in yearly revenue.
To apply: http://bostinnovation.com/spreadtheword
To learn more about the Spreadable Startup Series, check out the Grasshopper Group blog.
With our recent announcement about PCI (Payment Card Industry) compliance here at Chargify, the new statistics put out by Verizon Business couldn’t have come at a better time.
“PCI compliant companies are 50% less likely to suffer a data breach. “
In order to be PCI compliant, there are certain rigorous requirements companies must adhere to when processing cardholder data. But if you think that the process to become PCI compliant is too overwhelming for you or your company, have a look at what happened in January of 2007 to TJX Companies, Inc when 45.6M card numbers were exposed.
There is a lot we can learn from the data breach they suffered. After what happened to them, being PCI compliant just seems like a smart business decision and a no brainer to us.
With several on Rails developers here at Chargify and an even bigger Rails community in our customer base, we thought it would be great to sponsor this year’s Rails Rumble.
This weekend, Rails developers from all over the world, including two teams from Grasshopper Group, will be competing in the 2010 Rails Rumble.
What is Rails Rumble?
“The Rails Rumble is a kickass 48 hour web application development competition. As a contestant, your team gets one caffeine-fueled weekend to design, develop, and deploy the best web property that you can, using the awesome power of Ruby and Rails.”
Over the last decade, software as a service (SaaS) has taken the computing world by storm. By being able to deploy software over the web, people no longer have to download bulky software packages and it’s given businesses a lot more flexibility. Today, SaaS is used to power a wide variety of business applications: sales force automation, CRM, document management, financials and of course Chargify.
In honor of SaaS flexibility and the recent release of the iPhone 4, we review some of today’s best SaaS apps for the iPhone and iPad:
Salesforce.com Mobile
Long one of the market leaders in customer relationship management, Salesforce.com also offers an iPhone app that can perform most of the important tasks of the full, web-based service. Salesforce.com Mobile (which also works on the iPad) is a robust application which allows sales teams and managers to track progress toward targets or quotas, record the status of various deals and proposals, store contact information for key decision-makers, view closed sales to date and more.
A lot of questions come to mind when running an e-commerce business. You know you need a payment gateway but you may be wondering what a payment gateway can do for you and how you choose one. Basically, payment gateways enable you to accept credit card payments and transfer billing info to your bank so that payments can be deposited into your internet merchant account each month. Yes, that’s the basic version.
Here at Chargify, we have paired with four of the top-rated gateways to ensure ease and security for our customers. These gateways are Authorize.net, Beanstream, PaymentExpress, and TrustCommerce. Whichever one you choose depends on your company’s specific needs. To help you figure out the differences, here’s a brief description of each (note: each payment gateway supports buyers in any country):
Authorize.net
As a leading provider of gateway payment services since 1996, Authorize.net allows merchants to settle and manage credit card transactions for a number of e-commerce applicants.
Authorize.net is an ideal choice for US based companies since customers since the merchant account must be located in the US. Authorize.net is PCI compliant, and customer support and fraud prevention are included. There is a setup fee of $99 and a monthly charge of $39.95.
This Thursday, July 29th, the Chargify team will be at the 4th annual Boston TECH cocktail event.
For those of you unfamiliar with TECH cocktail, the company is run by two entrepreneurs and works to connects local technology companies through awesome events like the one we will be at Thursday.
What Happens at the Event?
Boston area startups, investors and others in the tech industry will be gathered at the Microsoft NERD Center in Cambridge, MA to network, showcase their companies and maybe generate some funding interest.
Along with hundreds of attendees, there will be eleven “Showcased Startups” (including Chargify). Each company will have a table set up expo-style where they will feature their company, answer questions and network with other local entrepreneurs.
*Update* - See some photos of the Chargify team from the event at TECH cocktail.
If you haven’t seen our recent tweets you may not have read about Grasshopper Group. Grasshopper Group is the recently launched endeavor from the company that brought you Chargify and we wanted to share the great news about it.
What is Grasshopper Group?
Grasshopper Group is the parent company of Chargify, Grasshopper, Spreadable and everything else we do in the future. Grasshopper Group will be where we focus our entrepreneurial efforts, like National Entrepreneurs’ Day. This will allow of our companies & products to evolve, improve and be the best in their respective industries.
How will this effect Chargify?
Since Chargify was already technically “owned” by Grasshopper Group, you will not notice any changes.
With over $131 billion in online sales in 2009 (U.S), we have definitely become an e-commerce oriented society. This in turn, means we are also a society where customers are more vulnerable to identity and credit card theft.
As a business it’s extremely important that you protect your customers’ data. Luckily, there are a number of solutions out there designed to ensure your customers’ data are secure. Aside from software, there are a few precautions you can take:
Since we entered private beta, one of the most requested features has been PayPal merchant services support. PayPal’s Website Payments products ease the pain of finding a gateway and merchant account, making it simple to start charging customer cards.
This week, we introduced support for PayPal Website Payments Pro in the United States. Next week, we will add support for PayPal accounts in Canada and the United Kingdom. We also plan to support PayPal Payflow Pro in the near future.
In 2010, any company that receives a substantial number of credit card orders faces a grave threat: chargebacks. For those unaware, a chargeback is when a customer reverses an order they made from you and then gets their money back. Originally, chargebacks were created to protect consumers from unscrupulous merchants. Rather than endlessly arguing about unauthorized charges, customers could simply initiate the chargeback and be done with it.
Unfortunately, the ease of initiating a chargeback has created a class of unscrupulous consumers. Increasingly, consumers who have not been wronged in any demonstrable way are using chargebacks heedlessly. Other chargebacks arise from innocent clerical errors. All chargebacks, no matter the source, have the potential to wreak havoc on the cash flow of card-accepting businesses. Below, we’ll explore several ways that companies can protect themselves from chargebacks.
Know Each “Reason Code”
While chargebacks are designed to be easy and automatic for consumers, they cannot simply be executed without reason. Rather, there are four separate “reason codes”, one of which customers must state to their credit card issuer and which they, in turn, are required to provide the merchant.
Venture capitalist Paul Graham expressed an under-appreciated nugget of wisdom in his article on mistakes that kill startups. Unlike “winning an Olympic gold medal, where the problem is well defined”, building a successful company is actually “more like science, where you need to follow the trail wherever it leads.”
Therefore, Graham concludes that the worst person to run a startup is someone who “has some great idea they know everyone is going to love, and that’s what they’re going to build, no matter what.” But while plenty has been written about successful startups in general, little has been said about companies that thrived by changing their strategies instead of clinging to those they started with.
Below, Chargify examines six companies whose flexibility took them to new heights.
PayPal
PayPal, believe it or not, was not founded to be the online payment service that it is today. In her book Founders at Work, Jessica Livingston interviews PayPal founder Max Levchin. During the interview, Levchin reveals that PayPal was originally envisioned as a cryptography company, and then later as a means of transmitting money via PDAs. Only after several years of trial and error (and overcoming user fraud that almost destroyed the company) did PayPal find its sweet spot as the default online payment system of millions.
A frequent complaint about web startups is that despite being cool or popular, they lack a clear business model. One textbook example was YouTube. The service had millions of adoring users, but financially speaking, YouTube ran at a loss until Google bought them out in 2006 for $1.65 billion. For a time, the default business model for high-traffic but unprofitable websites was displaying ads. But since effective advertising depends on more than just mass exposure (like targeting) it is not always an effective business model.
A better answer for many has been the “freemium” model, where a company offers its core product or service for free and charges for advanced or special features. Rumors have cropped up in recent years that web giants like Twitter and Facebook, for example, are considering freemium strategies. Below, we’ll profile seven companies that have already mastered the freemium model, and how they did it.
Skype
Web-based telephony company Skype provides an excellent example.
Chargify is officially entering into public beta today, and we couldn’t be more excited!
Having originally launched at the TechCrunch50 Conference (http://techcrunch50.com) in San Francisco, CA on September 14th, 2009, we’ve been steadily growing our beta list this past 6 months while making numerous improvements and adding new features.
Some highlights/ improvements include:
Plan on attending SWSW (South by SouthWest) 2010 in Austin, TX from March 12th - 16th? Or are you already at SXSW enjoying Austin? If so, you are in luck because the Chargify team is there too and will be through the 16th.
Curious to meet the team behind the company? Or maybe you just want to get your hands on some Chargify schwag?
Either way keep an eye out for us. if you need a reference as to who we are check out our About Us page and put a face with the names.
We have a few surprises up our sleeves as well so be sure to keep tabs on us on Twitter @chargify.
This is a guest-post from Sean Harper, co-founder of TransFS. He is a zealot about making sure business owners get a fair shake from their financial services providers.
Welcome to the Bullring, the blog dedicated entirely to empowering entrepreneurs and developers to start and run successful businesses based on recurring revenue models.
Let’s lay it out there. Recurring billing is a pain in the ass. Credit cards get declined for a million different reasons, you have to deal with upgrades/downgrades, proration, refunds, credits, customer communication, fraudulent transactions, and the list goes on. It’s no small task to implement a system that handles all of the potential pitfalls of billing on a recurring basis.
