How do you handle subscription billing in 2020?

Hey guys 👋

I am in the process of integrating a recurring subscription model 💰 in my SaaS that will have 3 tiers. It will be focused more towards B2B and I am not excepting to have thousands - rather hundreds of customers. The backend will be node.js and the frontend vue.js.

Given this information I have some questions:

  1. Which payment API would you recommend to me? I have done some extensive research and found basically ended up with two contenders that don't charge an upfront monthly fee: Stripe Billing vs Chargebee.

Chargebee seems to be more sophisticated - Stripe Billing seems to catch up, also offer dunning, and their basic analytics might be enough for the start.

  1. What do you think about Stripe's Checkout hosted payment page + Billing portal vs coding your custom solution? Do you think customers care about getting redirected to a separate page and then back?

  2. How important do you think is PayPal integration? Besides e-commerce, I rarely see it in SaaS.

  3. How important having a tax option? Now, this might sound trivial but I have rarely seen taxing options on most SaaS I have subscribed too.

What do you guys use? Would love to get your help on this!

  1. 2

    This is actually a trap I ran into numerous times. When you own a membership site or community, you need to focus on what matters to members.

    You need to constantly ask: where is the value?

    Will coding a custom subscription / payment system really move the needle for them? No. 100% no. It’s likely they won’t even notice.

    PayPal integration is important. I see a good 30-40% of conversions come in via PayPal. I’ve seen similar reports from other people.

    I recommend using the lowest common denominator. If your community is on Wordpress that’s something like Restrict Content Pro. If you’re using Discourse, maybe there’s a plugin for that which you can use.

    I'm also building a IH/HN like option, Inter.

    I’m not sure about your tax question. Do you mean passing that fee onto customers? Technically you could do that in anything by just adjusting the price, no?

  2. 2

    I'm pretty happy with Stripe so far.

  3. 2

    I have used Gumroad; very easy to setup and you can embed to the website. I believe it is built on top of stripe but IMO less work to setup than stripe components (I'm a dev) and the fees are still very reasonable. In excahnge they manage user payment methods and other private info so you do not necessarily need auth system - depends on what you need/have setup already. The API has some limitations if you want to automate actions following a sale but I was able to work around it just fine. There are hooks to listen to sale and cancel subscription events for example.

    1. 2

      It feels like Gumroad has been adding more and more functionality lately. Do you think it’s ready for SaaS?

      1. 2

        Depends on what you want to do and how mature your product is. If you want a completely seamless/own branding then I would do stripe components. The drawback there is you will need to do more work. If you are okay with gumroad branding at checkout then sure.

        You can check out my Gumroad subscription setup here. There is a promocode "freepartay" that will let you skip the card. You can also add custom fields (I have added two custom fields) and prefill the fields if you want. I have a server that listens to subscription and cancellation events through Gumroad API; then I can enable/disable functionality based on these events automatically.

        The problem I have currently is with promo code it appears it carries over and I can't limit it to e.g. first month only; although I can see with the sales event that a promo code was applied so I can handle that myself, I just wish I did not need to. You can do things like - 50% off and limit the total quantity to e.g. first 100 people only.

        1. 1

          Forgot to say that you can do different tiers also and different pricing for different subscription periods, e.g. paying every 1 mo. vs making 1 annual payment.

          All those features are built in so I encourage you to explore if it will work for your use case.

          1. 2

            That's pretty neat. Looks like it's pretty powerful for simple enough subscriptions. Thank you for explaining it to me. I'm in the EU so they're one of the few solutions to avoid tax troubles.

    2. 1

      I see. I have been using gumroad for downloadable products but never touched their subscription option. I guess it just did not look that sophisticated at that time.

      Still not sure if they are ready for Saas?

  4. 2

    I did the Chargebee integration for my workplace a few years ago (when "Stripe Billing" did not exist). Some hair-pulling subscription+metered use-cases.

    Chargebee offers a plethora extras on top of Stripe (or any other payment gateway)

    • tax regions
    • currency-based pricing
    • out-of-the-box integrations
    • also the ability to use multiple payment gateways (Braintree? Sure)

    It really helps when your subscription system has complex use-cases that you can model over their platform/layer. Stripe Billing is slowly catching up though. Chargebee has a new product line called RevenueStory that offers subscription analytics.

    That said, I'm currently exploring Stripe Checkout for my hobby projects - because I don't need the extra layer that Chargebee offers. Probably that should be your deciding criteria too - do you need the extra stuff that Chargebee offers?

    1. 1

      Very interesting. Well that's the thing, I am not quite sure if I need all that extra stuff that Chargebee offers. What I really need is a system that handles VAT since my businesses are based in Europe. There are some stripe add-ons but they are too expensive for starting out. Also, I really like that Chargebee and Paddle offer other payment systems too and they have a convenient checkout popup where your users don't have to visit a completely separate page. But to be honest, the only real problem I am trying to solve is the whole VAT thing...

      1. 1

        @dominikSo There are two ways to do this:

        • Use Stripe and charge a price which will allow you to eat the VAT yourself.

        • Use Chargebee or Paddle if you insist on charging an explicit VAT during payment.

        I would recommend just getting it out with Stripe and then switch to an appropriate payment system later. Only have to handle VAT if we had customers (I’m going to be selling stuff soon too).

  5. 2

    I've only used Stripe for the simple reason that their API docs are great and the management UI is user friendly. They've recently come up with the hosted payments/subscription page I believe, which I think is worth using for the time you will save, unless you really don't want your users to leave your app (maybe because you want to keep them in your branded UI).

    1. 1

      100% agree - their docs are great. Do you have customers in the EU? How do you handle VAT with stripe?

      1. 2

        Definitely not the right person to ask about customers since I implemented it on an app (https://techjobhunt.com/) that never ended up having any customers 🙈

  6. 2

    Many of our users use PayPal. So for me, support of PayPal is essential. I also prefer to pay with PayPal if available.

    1. 1

      Thanks for the input. What kind of product are you selling? A SaaS? Mostly to businesses or consumers?

      What provider/s do you use?

      1. 2

        I haven't implemented recurring subscription yet. I will add it later this year. My products are B2C ecard yearly membership and B2B ecard services. Currently, I use Braintree and PayPal. I am definitely interested in what you will decide:-)

  7. 2

    Another option is Paddle. No monthly fee, can handle subscriptions and other bits on top. It was also quite easy to intergrate.

    I've not used Stripe or Chargebee so I can't compare them though sadly.

    1. 1

      Thanks for mentioning Paddle! I actually had a look at it about 2 years ago and the the whole branding and positioning just did not feel right to me. I just checked it and it seems that they have completely redone their positioning and design. The developer docs look great too.

      I am definitely going to try out paddle now! Unfortunately, they do not share their pricing publically. Do you know their pricing model?

      1. 1

        Well, they might have changed their looks BUT I am curious about if this is still relevant: https://jasminek.net/blog/post/paddle-problems/ This sounds horrible and quite unacceptable to use 🤔

        1. 1

          Sounds pretty bad. I guess I won't consider it.

          1. 1

            Hmm yeah I currently moving back and forth... Paddle seems really interesting, especially for the whole VAT, EU VAT thing (my company is based in the EU). I have also read some positive experiences with it so I will try to gather more information whether they are as bad as it seems or not.

  8. 1

    Hey Dominik!

    Check out www.outseta.com as well—we allow you launch Stripe billing in seconds. We give you a widget that you can add to any page to handle your checkout experience, so you don't need to take users off of your site. We also support taxes and give you a suite of other tools you'll inevitably need (CRM, email marketing, help desk).

    Also, we're a Stripe Verified Partner: https://stripe.com/partners/outseta

    Happy to chat anytime!


  9. 1

    Hi Dominik,

    We have just launched Abowire, to solve what you posted. Abowire is an all-in-one Subscription Management software for European Businesses. We handle payments, banking integration (through Open banking), recurring billing, Taxes (VAT Compliance & Moss Reports), Invoicing, customized checkout and some basic analytics.

    We support payment integrations with Stripe, Paypal, Adyen, etc... and also direct Bank integration & sync with EU Bank Accounts, which removes the banking fees from the payment providers.

    I am one of the Co-founders of the Startup and we are looking for early adopters to work together through this phase.

    Let me know if you are interested, I'd be more than happy to share our product. Just drop me an email to [email protected]. We are based in Berlin.

  10. 1

    We are based in the UK so we added tax support for any subscriber both in the United Kingdom and European Union. So we basically charge and collect the correct tax for any users who purchase within our tax zone.

    Also needed to make sure we record on the back-end where the customer is from and what tax - if any is charged - so we can then pay that tax to the correct authority and account for it.

    We've used PayPal in the past but have recently switched over to Stripe.

    1. 1

      That sounds like the way to go if you already have a decent amount of customers. For getting started, especially as a solo bootstrapped founder, it seems like it would take too much time with this approach...

      You said you pay the tax to the correct authority - have you heard about MOSS? Not sure if that is what you actually mean but if not, it could save you some time. Then again not really sure what the situation is right now for Brexit 🙃

      1. 2

        Ah I see you are in Innsbruck, so its simple for you and can use MOSS. Not sure what you do about any UK sales but the EU side is simple. Paypal was quite nice as you could set up all the tax rates for each state and the payment form would present the correct one. However we've just switched to Stripe as it gives a better non-branded interface onto our payment forms.

      2. 2

        Yes I've been using MOSS for years although now the UK has left the EU its not as straight forward as it was. It was part of the UK HRMC website but now it won't be. To be honest with Brexit as it is I'm left confused also as to what to do regards tax collected for EU sales, but luckily most of my sales have always been from the US or UK, so for now until I understand the changes, I've left EU sales sit under the tax radar!!! it was all fine before and easy and I had everything set up to deal with it.

        I think the base thing to do is get your back-end database set up so you can record where the sale was made from and store any tax you collected - when you start to do it - so you are all set up to do it properly when it becomes applicable or clearer.

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