Yesterday a friend and I spent some time talking to Aria Systems, a company which specializes in billing systems for games. Basically, they provide the webpage by which users can pay, they handle the payments, and they pass the result of the transactions back to the customer (me). The good thing about this is I then do not have to get a secure webpage and handle these things myself. Although admittedly it is not that hard – I’ve set up this billing system before and it only took me a few days, even with recurring billing. I just like the security of knowing that a 3rd party is handling this, so I am protected from credit card fraud, webpage issues, etc.
The bad thing about this is how much they charge – the setup fee is $1500, even for the most trivial case (such as mine – just a flat monthly fee). They also take 2%, in addition to what the credit card providers themselves take. This will amount to over $1,000 a month and would only get larger as the game gets more successful. This 2% does not go down until you take in a million dollars a month, at which point it goes to 1.8%. That seems pretty outrageous to me. 2% of a million a month is $20K a month, just to have your billing processed by a 3rd party. For 20K a month I could hire a team of 3 guys full-time and host my own servers, and I doubt it will take that once the initial systems are written.
Anyway, I’m willing to go with that, except for one part in the contract I’m seeing if I can negotiate out. They want a 3 year exclusive deal to provide this service. What I said to this was:
I’d like to add “This agreement may be terminated by either party at any time, with or without cause, with 3 months written notice.”
With this change I can agree to the exclusivity agreement. Without this change, if Aria were not able to compete on merits in the marketplace, I would be locked in to providing my customers with less than the best possible service. If you’re confident that Aria is and will remain the best provider of billing services, then there shouldn’t be any problems and I will have no reason to switch.
It seems ridiculous to me that they even ask for this. The way to keep my business for 3 years is to provide the best service at the best price for 3 years, not to force me into the service without my prior knowledge of how good the quality is. I have a feeling the reason for this is what I was saying above – at my initial levels of sales, it’s cheaper to pay them than it is to hire my own guy and do it myself. At higher levels of sales, only someone with no other choice would pay their prices, which is what I think they are counting on.
Their responses to my initial emails only took minutes to get returned and its half a day now with no response to my last one. While I could be wrong, there’s a good chance I’ll never hear from them again. And that’s fine with me. If a company themselves do not feel they can compete on the merits of price and service, then I shouldn’t feel that way either.
*** EDIT ***
They got back to me a day later with an OK.