You want to sell digital goods, typically some kind of stream or download, like software, logos, designs, webinars, ebooks and so on. Should you simply add a PayPal or Stripe checkout to your website? We compare the concepts of payment providers and resellers.
Selling digital products is not that simple, at least if you want to adhere to the laws of countries all over the world. If you sell a digital good, you have to collect VAT, sales tax or similar from your buyers.
For example, if you sell to residents of the European Union, you have to maintain and collect 28 different VAT rates for all member states of the EU. You have to get a VAT identification number from the EU, or from your member state, if you are located in the EU. On a regular basis, a declaration needs to be sent to the fiscal authorities and finally you have to pay the VAT - at least, to one single bank account.
This is not limited to the European Union, other countries have similar laws. If you want to sell digital goods and focus on your product instead, you need a reseller. A reseller covers more responsibility than typical payment providers like PayPal and Stripe. It is placed between you and your customers. On the customer’s receipts, the reseller appears as the seller of the product instead of you (uhh, that makes sense, doesn’t it?). You have just one singular contractual partner: the reseller, which pays you off periodically. Of course, that higher responsibility comes with higher commissions.
We’ve been using FastSpring for a recent customer project. FastSpring is a big reseller, based in the US. Within their docs, they provide an impressive list of taxes they do manage for you. FastSpring offers a complete featureset for almost every use-case.
A few words about how FastSpring works: FastSpring can either provide a complete web shop for you, or you can integrate it deeply within your own website. In that case, FastSpring will open a modal layer for checkout. For each buyer, FastSpring creates a password-less account, identified by e-mail address. After every successful checkout, they send out a link to manage all purchases and subscriptions. FastSpring offers a lot of options to serve your digital goods and/or license keys after checkout, called fulfillments.
Finally, from the developer’s point of view, you can activate webhooks, call their APIs and make use of a powerful management dashboard and easy testing modes. The technical documentation is comprehensive, but sometimes inconsistent. I recommend to schedule enough time at least for your first FastSpring project to figure out all the details. The support responses in a few hours and the activation, which is required before charging real credit cards, was completed within 24h.
I have seen these similar providers so far, of course there will be more out there:
You should choose carefully whether you need a reseller or just a payment provider. A reseller is more expensive, but it can help you to abide by the law and handles stuff like taxes and invoicing for you, letting you focus on your product!