The financial world for small and medium-sized Mac software vendors is going through some interesting changes. Rumors of Google’s GBuy being released on June 28 put me in the mood to expect a shake-up, and today I’ve learned that Digital River has acquired eSellerate, a very popular payment processing service for Mac developers.
Strangely, I can’t find any confirmation of the sale on the net. All I have to go by is this email note I received directly from MindVision/eSellerate, announcing the big changes and what I as an alleged customer may expect from it. Apparently Digital River is buying up companies so quickly that they don’t have time to update the web site. The press release page does contain an announcement of acquisition, but it’s for a different company. And it’s old news! That acquisition happened a full week ago!
What is an online payment processor, and why do small-timers like to use them? To accept money through the Internet these days you either have to have your own credit card merchant’s account, or else use a payment processor who deals with all the nitty-gritty of credit cards or bank transfer from your customers, and periodically sends you a check. James Duncan Davidson recently wrote about the risks of accepting online payments, where he points out that in addition to the administrative headaches, you also take responsibility for safeguarding (and potentially compromising) the user’s private credit card information.
The services provided by these companies vary, but at a minimum they all allow people of the world to give you money for your product or service. Many of the services also provide added value by automatically handling sticky issues like sales tax computation, serial number generation, annual reports, etc. eSellerate in particular has focused on adding value in the areas of integrating the sale and product activation into the application itself. These optional features allow programmers to put the ability to accept a credit card right into the application itself, and for the application to “phone home” to eSellerate with information about the computer it’s being installed on, to prevent multiple copies of the same registered application from being used at the same time.
Until today most Mac developers I know considered their options for payment processors to be PayPal, Kagi, SWREG, and eSellerate. Today those choices remain the same, but we sit in anticipation of what it means that eSellerate is owned by a juggernaut of the PC shareware registration market. I don’t really know what Digital River’s reputation is among vendors, I just know they’re big and relatively unknown on the Mac today.
In general I’m for changes and evolution in this, the “market market.” Things are pretty good for independent software vendors today, but there is much room for improvement. Hopefully the acquisition of eSellerate and the impending arrival of GBuy means we are about to enter an era of competitive innovation.