Last Update: June 18, 2008

If you're going to write software for the public you have to provide a way for customers to actually get the software. Sounds reasonable doesn't it? A standard web site is easy to set up and produce these days, but things get a little more complicated if you want to actually sell your software.

E-Commerce is a tricky subject that doesn't have to be so difficult. There are many providers available that will gladly help you transfer customer money into your bank account - at a price. So which company has the best deal?

I've put together a simple interactive matrix below of the most common e-commerce providers for your mISV. You can even enter your own provider's information as a comparison. Just fill in the box for the price of your product and monthly sales information and you'll see what each provider will cost you on an annual basis.

Many providers have different fees for increasing sales volumes, so I have marked those as "Dynamic" and I automatically figure out the correct numbers for you based on the figures you entered in the cost and sales table.

I also really don't want to be in the business of updating this table all the time so I can't guarantee that these provider fees will be accurate after the date of last update.

If I missed any common providers let me know.

I was surprised to see that the standard bank terms are competitive with the two flavors of PayPal, especially after the first year when the setup fees don't apply. If you have your own shopping cart and want total control over your back end I would roll your own instead of PayPal, but if you don't have the expertise then PayPal is a viable option. The Pro version allows you to accept payments from right within your site.

Google Checkout comes in first at just about any price point, and Google publishes their complete API if you want to integrate your e-commerce with your own shopping cart. This is the best of both worlds over your own bank merchant account since you can get all the benefits of having one by controlling all transactions from your pages.

Unfortunately Google has been plagued with all kinds of reliability issues and the consensus is that if you use Google Checkout you should enable a backup processor also. If you don't want to do your own checkout coding then a combination of Google and Paypal are what most mISVs are doing, but I would still be wary of using Google at all since a failure to purchase can make your whole company look unreliable. And nobody wants to buy unreliable software.

Some of the vendors, like Plimus, use different percentage cuts based upon the selling price of your software. Sometimes the percentage goes down as the product cost goes up, and sometimes the percentage goes up.

The newest addition to the calculator list is EC Suite. I must say that although they aren't the least expensive of the group they are competitive if all you need is a payment processor, but when you need more than that they simply blow the competition away. So many perks and bonus features are included in the same low rate that they are a true one-stop-shop for a micro ISV. I think you'll be amazed at all they offer.

If my list weren't alphabetical I'd put them at the top.

If you want the ultimate in stability and can code your own shopping cart then the bank route is the way to go, and if you can find one that doesn't charge ~$30 extra a month it will put you in the same price level as Google.

My wife is now selling physical products that require on-line inventory status, so she will need integration into the back-end database. I don't think any of the vendors support the level of integration I need using their hosted shopping carts, so I will write my own shopping cart and have it go against my SQL back end. Since I have to write this for her site anyway I'll reuse it on mine too, even though I'm going to be purely digital content for a while.

Another thing to keep in mind is that if you host any payments on your site you'll need to enable SSL, which adds the cost of a digital certificate to the mix. At the time of this writing GoDaddy has the cheapest price at $19.99/yr.

Remember that the actual transaction may be just a small part of the service provided, so a higher cut of your sales may be justified for other services rendered. You'll have to visit each site to see what other services are offered and whether the cost is worth it.

So many choices, but at least the pricing is a little clearer now.