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ecommerce rails merchant accounts oh my

September 21, 2005

So I'm trying to get the ecommerce end of things up and running for HelpSpot. As discussed over here, there really aren't any good off the shelf options for a small software startup so you're basically on your own.

Before I started serious work on the ecommerce system, store, and download system I wanted to get my merchant account and credit card gateway setup. Of course I could have chosen to use one of the hosted systems such as, godaddy, esellerate or some of the others mentioned in the link above.

These are excellent options for consumer software and if that was the market I was in I would most likely go that route. However, in the B2B arena there are some additional needs that I feel can only be addressed by fully integrating the store into my site. Of primary concern was the situation where people would be adding more licenses or support after an initial purchase. This is fairly complex to do with the existing services because they all want to know about a "product" ahead of time. In my situation this is tricky because under some circumstances I might need to charge an arbitrary amount, which won't be known ahead of time.

I was hoping to find an integrated merchant account/gateway solution, but this actually isn't too common. I also had an additional constraint in that I wanted to use Ruby on Rails for the development of the store and administrative systems. Amazingly there is currently only one payment library system for Rails and it only works with Of course I could build the gateway integration, but honestly I don't have that type of time, nor am I that interested in doing it. Again this is all software I need to write to run my business, but is not part of my core product.

So I was hoping to go to and sign right up. Alas, they don't want my money. Instead I have to go through one of their "resellers". Heh. Every single one of them have names that make your skin crawl and when you get to their websites you're greeted with a site created from a default frontpage template. Needless to say I wasn't feeling good.

In the end of all the companies on the list there was only one I had heard of, Wells Fargo. At least this is a big publicly traded company. Another plus in their favor was that they had an integrated registration where you signed up for both the merchant account and gateway all at once which was nice. In the end I went with them.

To be honest the entire process was pretty obviously created during the dotcom. In fact the copyright on the registration pages was 2001! Yet another area where a small company should come in and make a compelling product.

Another benefit of going this route is that it's just cheaper. esellerate for instance has a 15% transaction fee. I've worked too hard to give 15% to them. Doing it this way should cap my costs at no more than 6% even under the worst conditions and with extra fraud protection.

Now it's on to actual construction. I've got version one of the store spec'd out and I just started it out tonight. Man Rails is cool. It doesn't read minds, but it does make getting started much easier. I have a feeling this is really what all the hype is about. At the end of the day I don't really think I'll have less code or it will really be much less complex BUT I 'll feel like I jumped in at the middle instead of drudging through the beginning and that's big, really big.

More updates are sure to follow so stay tuned.

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