Developers February 19, 2020

Would you use Paddle, Chargebee, Chargify, or just Stripe?

Noah Bragg @noahwbragg

I'm still early in my SAAS businesses journey. But I'm just looking at different payment options out there and doing some research before I choose one to start implementing.

Wondering if you guys would use any of these? Looks like Paddle and Chargify may be pretty expensive so may not be worth it for early stage. But Chargebee does have a free tier up to first $50k in revenue.

Stripe would obviously be the alternative.

From what what I understand, these other options handle a lot of the complications that come with billing and the financial infrastructure of a subscription based SAAS.

Here are the links to them for your reference:
https://paddle.com
https://www.chargify.com
https://www.chargebee.com

  1. 7

    Hi Noah. I have used Stripe, Chargebee and Paddle for different projects.

    My suggestion is to use https://paddle.com, as they offer card and PayPal payments and handle all of the VAT headaches of digital taxes. They only pay out once a month (usually between 7–14th of the month).

    Stripe is obviously great and super flexible, but then you're stuck with tax reporting. They have better rates and faster payouts. If you start selling digital products to EU customers, at some point you're going to have to figure out how to charge and then pay the EU taxes (plus, every country has a different rate, so you have to show at checkout the correct amount!)

    Chargebee is a larger product and seems overkill for most SaaS products. For one of the projects I built an integration for I had to use Stripe for the checkout and Chargebee for the processing, which became very cumbersome (ie: why not just use Stripe on its own).

    I've been a happy Paddle customer for 5+ years. I don't ever think about their higher fees as everything is so much easier, as mentioned by @kuba_ziol.

    ---

    Update 21 Feb.

    • I just wanted to add that Paddle's checkout flow is great and much better than Stripe's Checkout product, in my view.
    • For anyone wondering, Paddle's fees are 5% + 50c.
    1. 2

      You make some very good points for Paddle. Those make sense for a business that is making money and farther down the road. But what about a business that has no revenue and just starting out? Would using something simple like Stripe checkout be better in that case? maybe when I expand to EU I could look at switching to Paddle?

      1. 4

        I used it from day one and was happy. Have you calculated how much the extra fees are? For the extra maximum ~$2 I pay Paddle for their extras is totally worth it for me.

        I think if you're planning to use Paddle in the future, then start with it now. Otherwise you'll have customers running on two different billing systems, which would be a nightmare to smoothly integrate into your customer accounts.

        Another alternative is to use Stripe plus a tax add-on like Taxamo to handle the tax issues. Then you can stick with Stripe the whole time. Just be aware that Taxamo has its own cost (which for me was more than just using Paddle).

        I hope you figure out the best solution for your project. Paddle is perfect for me but you may find Stripe as a better option.

        1. 1

          Thanks! I appreciate the advise!

    2. 1

      Wow, I didn't know Paddle. It seems great.
      I was planning to use Stripe + quaderno.io for colofon.io
      Do you think it's a good alternative or Paddle will still be easier and cheaper.

  2. 4

    Hi, had the same question myself and checked the major players that are focused on software sales. I assembled a list online, Paddle is one of them. ( https://www.starmessagesoftware.com/e-commerce-software-publishers )
    My suggestion is to go for a solution that is a "merchant of record", which means they issue the receipts and invoices for the customers and therefore bear the compliance with tax and vat.
    You should also check if their subscription models match your needs.

    Happy selling!!

    1. 1

      Thanks for sharing that post. It was helpfull to see the comparisons.

  3. 3

    I tried several providers, ended up with paddle.

    Ease of use and minimal code setup. Awesome documentation.

    No company/individual verifications required.

  4. 3

    Hi Noah,

    I have read that your are based in the US. In case, that your main market is in Europe, I can offer you to use Abowire (www.abowire.com), an all-in-one Subscription Management software. I am one of the Co-founders of the startup and we are looking for early adopters (obviosly free of charge) to use our software and help us improve the product. We are based in Berlin.

    In Abowire we handle payments, recurring billing, collections as well as VAT Moss Reports and invoicing and some basic analytics. Currently, we are still building and improving the product. Our aim is to enable a scalable subscription business for startups by automating complex business processes and simplifying operations.

    Let me know if you are interested or if I can be of your help.

    Great thread - BTW

    pd. my email is [email protected]

  5. 3

    Hi Noah,

    I've worked with both naked Stripe and Chargebee + Stripe before.
    I can highly recommend Chargebee, especially for young companies. It takes a while to get to 50K revenue with a SaaS project, so you have plenty of time to make a decision about whether you want to keep using Chargebee. We decided to stick with them due to the following reasons:

    • Incredibly easy GUI and Dashboard
    • providing hosted pages & subscription management console out-of-the-box
    • Stellar support
    • A well-thought-out approach to dunning and payment settings control

    As mentioned, we have worked with naked Stripe before, but as much as I love Stripe, the subscription management product of theirs does not even come close to Chargebee's ease of use and customisation features. Stripe is definitely good to get up-and-running quickly, but you're signing up for a lot of lost time on data migration later-on when you need to switch to a more battle-proven subscription management platform.

    1. 1

      Thanks for the info on Chargebee. That does sound pretty good! Does Chargebee handle the EU VAT headaches that others mentioned?

      1. 2

        Sorry for the late reply - yes, Chargebee enables you to collect VAT numbers on the frontend and validates them fully. It still requires some minor implementation from your side, but they do location validation and all the headaches that come with it automagically

  6. 3

    Depending on where you're at in the process, if you want to try out a free solution from a fellow indie hacker that allows you to start validating your SaaS idea with real customers today as opposed to building a bunch of stuff and then finding out that nobody will buy it or that you need to pivot.. check out https://saasify.sh 😄

    1. 1

      hmm, I guess my fear is that I would out grow saasify pretty quickly and it wouldn't be worth the work to set up. It isn't too hard to setup Stripe Checkout. They do like all of the ui for you. and then it can be transitioned into something more complex or specific use cases later. How is the transition path for saasify?

  7. 3

    Well I wouldn't use Paddle because they don't show you prices on their site. Scumbag move. Absolutely hate that.

    1. 2

      They are in their Terms of Use page.

    2. 1

      I think thats a fine move. If you are really interested, you will be fine with dropping your email in to get it. I think that move makes sense for businesses that are pretty early and don't know what the best price point is yet. Eventually you should have a price page though.

  8. 3

    A thread full of great advice!

    1. 2

      Which side do you land though?

      1. 2

        I think (1) payment is harder than most think and implementation + testing of any provider is tedious (2) VAT + VAT reporting is hard (3) PayPal is a must because of way higher conversions

        I haven't used Paddle myself but what people write is quite convincing. Besides, I don't understand why people keep recommending Stripe, I rather would opt for PayPal because of PayPal but then again no tax reporting.

        Just compare:

        Paying with Paypal:

        1. Enter password (your PP user name is usually prefilled from the vendor)

        Paying with CC:

        1. Get your wallet
        2. Pull out and decide on the right CC
        3. Enter CC number
        4. Enter date
        5. Turn card around and enter security code
          => full of conversion breakers
        1. 3

          If the business is based in India, Stripe and some other compaines will ask you to enter user address as well. I think that is the nonsense with Indian RBI policy.

        2. 1

          I think you're simplifying the PayPal checkout too much here. Some people use PayPal enough that they enter a password. For most other people they may have to remember the PayPal email address they signed up with and go through a password reset, OR opt to do a card payment through PayPal. Having to inputt just a password to pay is—I would guess—an edge case.

        3. 1

          Because PayPal have a habit of seizing funds, or taking money deposited back out of people's accounts. Google it.

          There's never been an instance of Stripe doing this.

        4. 1

          but my business is also B2B. I doubt most businesses would use paypal.

          1. 2

            my business uses also paypal, same process, if I subscribe for some SaaS => Paypal because CC is cumbersome

        5. 1

          Yeah, I see what you mean. I'll take a look more at Paddle.

  9. 3

    For me, Stripe has always been adequate for subscription services. I never really understood the point of paying another few percentage points on top for some of these other services.

    I had a couple of clients use Recurly and they preferred it because they could swap the Stripe backend out for another payment process. One of them needed to do that when they got kicked off Stripe. Another did it to save money on payment processing once they got to a certain scale.

    For me, Stripe is enough and, actually, pretty darn great.

    1. 1

      Yeah, thats what I'm wondering if there are really only benefit in these services once I get to a bigger scale.

    2. 1

      This comment was deleted 2 months ago.

  10. 3

    Paddle works very well for me. I'm from the EU and I don't have to worry about all these VAT regulations - a big advantage for me. 🤯

    Despite the 5% commission, I saved a lot on accounting.

    Unfortunately, I didn't use the other services. 😄

    1. 1

      So you would recommend it? and recommend it for early stage when there isn't much revenue?

      1. 6

        Yes. In my opinion in the early stage, it doesn't matter if you pay 3 or 5% commission.

        For me much more important was the fact that I was able to quickly and easily integrate payments, solve the problem with invoices and focus on creating the product.

        When I manage to get more clients I will think about how to pay less commission.

        But you must consider that it worked for me and the VAT issues were quite important. 😁

        1. 2

          Thanks for sharing!

  11. 2

    I integrated Stripe and PayPal in a few days for divjoy.com and found it to be relatively painless. I handle all billing admin stuff right through their respective interfaces.

  12. 2

    Stripe is great for subscriptions, but there is a fair amount of setup involved to integrate with your app – if you're comfortable writing the flows and code it's a great option.

    https://payhere.co also looks like a great alternative

    Something to consider, with the latest EU 3D secure legislation is how each of these services handle subscription payments that require verification when the user is off-app.

    Stripe send an automatic email with a link to verify and complete payment which is a MASSIVE painkiller - trying to manage this yourself is a nightmare.

    1. 1

      What do you use then?

      1. 2

        Stripe :-)

  13. 2

    Stripe has only several countries.

  14. 2

    I've been using https://www.sendowl.com for 3+ years now and I'm quite happy. Fixed price with no commissions, it supports Stripe, PayPal, BitPay, Apple pay and some other local form or payments, it handles VAT MOSS for EU B2C generating reports you can use to submit your VAT to the MOSS system, it has a number of features you may or may not be interested like upsells, coupon codes, license keys generation..

  15. 2

    Noah, I have the same question. Thanks for asking. Great thread.

    Did you end up choosing?

    For a startup with 0 income, how about trying chargebee up to 50k, then switching to paddle?

    1. 3

      Although I've never implemented any payment before, I do know swapping something for another in the middle of all the growing is a pain in the ass.

      1. 1

        Could be true unless you only have a couple of customers. Might not be too bad to get them to switch.

    2. 1

      Well I think it does depend on your use case, what will be best. For me I'm leaning on startin out with stripe because stripe checkout is pretty easy to implement. Also, right now my mvp won't have a price page. I'll only start out with a few customers and send them to the checkout link. Once i have a better idea of what i'm going to continue building, I could then switch over to something else. I want to be flexible and fast in the beginning and I think starting with Stripe allows me to do that. I also don't want to spend much money right now because I'm not making any off my saas.

  16. 2

    The value that those services provide is a single solution for both PayPal and Stripe. It's tempting, but paying someone forever like that isn't ideal. I would roll Stripe to start, then implement Braintree for PayPal at a later time.

    1. 2

      They usually offer other plus like discounts codes, VAT reports, invoicing, additional payment methods. For me it's worth paying few bucks to have all that sorted out quickly and have more time to focus on my idea

    2. 1

      They seem like they do more than that though. They seem to handle some of the legal stuff or at least make it easier. Maybe some other stuff as well.
      But I think I agree with your approach.

  17. 1

    ReliaBills is a nice software too especially for startups since it's FREE.
    https://www.reliabills.com/

  18. 5

    This comment was deleted 2 months ago.

    1. 1

      Thanks for the recommendation. I could see that could be really important for businesses going international. I may just start out in the US however. It seems like the benefits wouldn't be as great when not going international. 2% plus 50 cents is a little steep if Im not using the core value. Still thinking through it. This definitely helps!

      1. 3

        This comment was deleted 2 months ago.

        1. 2

          Thanks for sharing that info and the link. really good stuff!

          More context would definitely help. I'm kind of doing the stair step approach to build a SAAS that Rob Walling talks about. Starting out I'm doing more of direct sales and I'm actually selling myself along the product as well like a consultant. It may be one off sales at first, not subscription.

          I'm doing all of this to learn as I go to make sure I solve the problem in the best way I can. So I'll have some times where I can make switches in my payments model and switch to what makes the most sense at that time. I'm going to start out selling to people near me so the international headaches won't be an issue.

          It does seem to make sense to eventually end up with something like paddle.

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            This comment was deleted 2 months ago.