Ask HN: To Ask for CC on Signup or Not?

Please understand this is just my opinion. I don't speak for anyone else nor am I necessarily an accurate representation of anything. This is my anecdote:

I have NEVER signed up for a new service that required a credit card up front. I HAVE signed up for free accounts, saw the value and then converted.

This is a little different for certain brands, i.e., AWS and such. However, for an unknown brand to want my CC info? Not a chance.

Unless I'm buying something I won't be giving up my payment information. Maybe not all users are as worrisome as me though.

Things that I sometimes give payment info for (but they do not charge right away) is when something is a free trial that converts into a paid subscription after X time.

Otherwise for freemium I'll give my payment info at the time of purchase but for the free part, heck no.

You also have to take into consideration that giving away your credit card info feels like you are making a purchase so even though that may mean the people are more willing to purchase when they do give info it doesn't necessarily mean it is a good idea to require it.

When in doubt, A/B test. Be sure to track the whole funnel, not just the initial signup rate.

My guesses:

- asking for a CC up front might make sense if the trial customers are burdensome and you want to focus your efforts on customers more likely to pay.

- if you are an unknown entity, or the pain level of your customers is low, the CC prompt may dramatically reduce signups.

But forget my guesses. When in doubt, just try it out.

I've tried both ways and saw an immediate increase in paid conversions when asking for cc info upfront (8x increase). I've talked to several founders that have tried both ways and all but one saw a significant increase as well. The number of trial accounts is lower of course.

Another benefit is that you can add a required textbox to ask for cancellation feedback when someone cancels. The feedback you get is awesome.

That said, you may get different results so it's worth testing. For something this important you'll want to let the data help you decide instead of relying on what others are doing.

This is great feedback. The magic about eight times increase in credit card capture is pretty huge. In my case, the application is very simple, and I think people need to use it before deciding to pay.

So I'm really thinking about going to a graduated payment/engagement solution. Doing up cells in the application might be the way to go for something with such a low price. In my case, I'm looking at charging $24 per year.

If anyone wants to check it out, visit http://last5.co

It really depends on how many comparable alternatives exist in the marketplace. Its no doubt that requiring CC's upfront will lead to recurring customers; but how many potential customers are you turning away? I would say for most startups you're not just concerned with revenue, but also adoption. You want your site to be used and talked about amongst social networks in person and online. This is greatly diminished when a customer bails from your site to a competitor before signing up. My advice is that if you are offering a good service that is so good that customers will be unable to find a comparable alternative; offer your signup for free and hook them with your kick-ass product. You're just going to irritate people when you start charging their credit cards and they aren't a huge fan of your business afterall. The only extra revenue you get by requiring CC for signup are tricking people into paying for a service they otherwise later decide they wouldn't pay for. This will only lead to a negative brand image, credit card chargebacks, and diminished market who has tried your product.