There is a school of thought among VCs, angels, and founders that startups should try to make money as early as possible, not necessarily because they should learn to bootstrap (then it is a requirement), but in order to learn how to sell, how to listen to the clients, and to show the investors that they understand their market and the basic principles of business.

This is not a bad way of thinking about building an internet business, but it not easy to do if you are in Europe and you have a non-standard idea for taking your customers’ money.

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Putting aside the treacherous mazes of the VAT, I would say that the biggest problem when selling to consumers and businesses in Europe is the dearth of the payment systems available on the old continent and their lack of flexibility for accepting new business models.

There is PayPal, Moneybookers, Google Wallet, and a few card payment processors, but that is about it. Not much choice there.

There is a reason why services like drop.io, mailchimp.com, or kickstarter.com did not appear in Europe before they appeared in the USA—they would not be able to use the payment processing options offered by Amazon (Amazon Payments, Amazon DevPay, Amazon Flexible Payments System, Amazon Simple Pay), that allows them to implement their business models (this is especially true for Kickstarter that needs to collect payment for a deferred transaction).

Balanced? Stripe? Square? Dwolla? Forget it. If you’re a non-US startup you cannot join the club.

There is a lot of talk about government support for entrepreneurs in Europe, but one simple thing that the European startups need is a wider selection of payment processing solutions. The fickle PayPal is not good enough.

Update: Sept 26, 2012 @ 6:00am GMT

A developer from Braintree Payments reached out to me on Reddit and said they recently added support for the developers in Canada and the EU.

Update: Sep 29, 2012 @ 6:46am GMT

Tiago Pinto suggests possible solutions on Twitter. Thank you, Tiago!

Update: Oct 1, 2012 @ 7:21pm GMT

Dr. Alvaro Feito Boirac suggests possible solutions on Twitter. Thank you, Dr. Boirac!