Requirements:
1- has recurring payments
2- invisible to end user
3- accepts canadian companies
4- (nice to have) easy to set-up
5- (nice to have) does not require a merchant bank account.
I've said this before (for which I've been roundly criticized), and I'll say it again.<p>The reason there is no good alternative to PayPal, and especially an alternative that works internationally, is the regulatory environment around money transmission in the United States. If startups expect to solve this problem, there needs to be a coordinated effort to change that environment just as there was a coordinated effort to combat SOPA.<p>Exhibit A - <a href="http://www.thinkcomputer.com/corporate/whitepapers/heldhostage.pdf" rel="nofollow">http://www.thinkcomputer.com/corporate/whitepapers/heldhosta...</a><p>Exhibit B - <a href="http://www.plainsite.org/flashlight/case.html?id=716056" rel="nofollow">http://www.plainsite.org/flashlight/case.html?id=716056</a><p>Exhibit C - <a href="http://www.plainsite.org/issues/index.html?id=1" rel="nofollow">http://www.plainsite.org/issues/index.html?id=1</a><p>Exhibit D - <a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fin&group=01001-02000&file=2000-2003" rel="nofollow">http://www.leginfo.ca.gov/cgi-bin/displaycode?section=fin...</a><p>To head off the most common objections: PayPal is grandfathered in at this point. You can only get away with breaking the law and hoping no one will notice for so long. The penalties for violation are criminal (federal felony), not civil. And yes, I'm biased as the head of a payments company affected by the law, but I'm not the only one, and I'm not wrong.
One of the best services out there is <a href="http://www.braintreepayments.com/" rel="nofollow">http://www.braintreepayments.com/</a> but you can also look at <a href="http://www.2checkout.com" rel="nofollow">http://www.2checkout.com</a>. Both of them have great solutions depending on what you need. We are migrating from PayPal to BrainTree this spring.
I like Saasy (<a href="http://saasy.com/" rel="nofollow">http://saasy.com/</a>). It's frictionless and supports international merchants but a little pricier than other options.
Possibly one of the Amazon payments solutions?<p><a href="http://en.wikipedia.org/wiki/Amazon_Payments" rel="nofollow">http://en.wikipedia.org/wiki/Amazon_Payments</a>
I think WePay deserves mention here, though AFAIK they don't yet support Canadian businesses. They don't require a merchant account, support recurring payments, and can be made fairly though perhaps not completely invisible. I've found their API quite easy to use.
Go with Beanstream as the payment gateway, and either Chargify or Recurly for the recurring payments. I've personally had no problem with this combination on many projects, and all of my clients are canadian companies.
Samurai from FeeFighters <a href="https://samurai.feefighters.com/" rel="nofollow">https://samurai.feefighters.com/</a>. They seem to be beta-testing their service for Canadian companies.
During my search, I have found that Stripe is the best solution out there. There is even a post with cost comparison (<a href="http://expletiveinserted.com/2011/10/02/stripes-new-online-payments-service-wheres-the-catch/" rel="nofollow">http://expletiveinserted.com/2011/10/02/stripes-new-online-p...</a>) that demosntrates that is also cheap.<p>Unfortunately, Stripe is for USA-only.<p>An alternative is, as some people already mentioned, <a href="http://saasy.com/" rel="nofollow">http://saasy.com/</a>, which is a FastSpring service.
Since you mention recurring payments as a priority, I'd recommend Chargify. They give a list of gateway options here: <a href="http://chargify.com/payment-gateways/" rel="nofollow">http://chargify.com/payment-gateways/</a><p>One of my businesses is an online retailer. We use PayPal Standard (but don't require a PP account) simply because the UI for generating postage and tracking shipments is very easy. USPS has an open API, but I've yet to find a payment processor that integrates shipping.