Cloud Business Apps

Which Billing and Subscriptions App to Choose for your Business?

Christophe Primault
By
Published on 21 September 2011
Found in Tips & Lists

For any web site owner with a subscription based business, managing the entire revenue life-cycle with a strong subscriptions and billing management solution is the lifeblood of the business.

We are covering the following topics in this article:

  • what elements are needed to manage subscription payments
  • how to choose a billing and subscription management app
  • the main functionality of these products
  • a list of the most popular solutions available in the market

What do you need to manage subscription payments

If you are new to this space, you need to understand the three core elements to take in consideration when it comes to managing subscription payments from your customers:

1) Billing and Subscription management: This will allow to get complete visibility on your revenue. It will automate tasks such as signing-up new clients from your website, invoicing them, collecting payments, managing the subscriptions details. It will track important sales metrics such as number of users and churn

2) Merchant account: It is a bank account that allows you to process recurring payment by debit or credit cards and/or debit transactions. It serves as a contractual agreement between you, your bank and a payment gateway

3) Payment gateways: They operates the secure transfer of payments between your website and your merchant account. For this service, the gateway providers will charge you a “discount rate” which is a percentage on the transaction. Each gateway provider covers different geographies, so if you want to have global reach, you will need to sign up with various providers.

Do you really need one a subscription management app

Think along these lines:

  • will this add value in terms of supporting revenue generation
  • how much complexity and additional cost it will create
  • what is the TCO

Should you build your own vs. choosing an external provider

Ask yourself:

  • is subscription management my core competency
  • will it be a core system to my organization
  • is my business model so unique that it won´t be supported by an external solution
  • what would be the ROI of building in-house

Using a third-party provider will increase your cost per transaction but you won´t occur upfront development cost and you will be able to offer a full set of services to your customers on top of the payment processing.

How to choose your provider

Keep these important questions in mind:

  • how long it will take to implement
  • is it flexible enough to meet my current and future products or pricing models needs
  • is it scalable enough to cope with my anticipated business growth
  • does it comply with the regulations that are relevant with my business. PCI DSS compliance being the most frequent requirement in this space
  • how will it integrate with my existing sales management and reporting systems
  • can it support my indirect sales and channels strategy
  • how viable is the vendor I am choosing

The main features to look for

All these core features should be offered by best of breed billing and subscription apps:

  • customer management i.e. sign-ups, activations, upgrades and downgrades
  • recurring billing
  • automatic invoicing
  • payment tracking
  • pricing plans management
  • failed transactions management
  • discounts and promotions management
  • customer messaging for billing and errors handling
  • multi-currency support
  • multiple languages support
  • shopping carts integration
  • open API for integration
  • strong analytic and reporting
  • main payment gateways support

Popular solutions to choose from

There are many tools in the market to choose from. All are available on-demand and should offer a free test environment. We are listing below the most popular billing and subscription management app.

Our favorite four (updated on March 22th 2013)

Zuora: Zuora has a reputation for being very easy to set up and use. It rates also strongly in terms of flexibility and scalability. The company has been growing fast recently and is very popular both with small and larger SaaS providers

Chargebee: ChargeBee can automate the entire billing cycle, from signup to invoices to collecting the money, even internationally. They make it easy to offer special promotions and various fee schedules. They provide an easy-to-use dashboard that gives you a current snapshot of users and revenue. Read our recent review of Chargebee

Fusebill: Fusebill supports both invoiced and online credit card collections, B2B and B2C applications. Online, offline and hybrid business models are all supported – no code or development is required to get started. A full API is available for SaaS billing and web application integration. Check our user reviews of Fusebill

Paysimple: It is one of the easiest to use online system designed to help small businesses collect payments (credit card & ACH) through manually entered payments, online web payments (through hosted payment forms) and recurring billing / invoicing

Chargify has a good features set. They are aggressively and successfully targeting SaaS vendors with a different pricing model. They bill by customer, not transaction

Other solutions to consider

Monexa is the pioneer of on-demand subscription and billing. It is a reputable provider that has already established a strong presence with the largest SaaS vendors

Recurly is easy to set up and use. They have multiple pricing plans for vendors of all sizes. They charge a monthly fee plus a cost per transaction

Spreedly is also popular with SaaS vendors with an affordable entry level option for $19/mo + $0.20/transaction. They support lost of different gateways including international. Should be considered if you plan to sell global

Aria Systems has been designed with the SaaS pay-as-you go businesses model in mind. They offer one of the most complete subscriber life-cycle management solution. Used by many large SaaS companies and also very strong in gaming, publishing and e-stores

Vindicia offers a complete subscription and one time payment management solution. It puts a lot of emphasis on integrating billing with your marketing systems so you can monitor customers acquisition and retention

RevX Systems is an enterprise class subscription and usage-based charging and billing app. They provide on-demand service activation, real time charging, automated recurring billing and integrated account management. RevX has more than 200 active enterprise level installations

ChikPea is a complete billing solution built on Force.com. Strong integration with Salesforce.com

Cheddargetter is very easy to plug into your web site. They offers a free plan for up to 20 customers. They have integrated with PayPal, which will allow you to bill your customers without a merchant account

The payment gateway route

Some payment gateways offer simple recurring billing features. This can be the best option for small businesses and start-ups that don’t have the volume to obtain a merchant account. Two examples of these solutions are:

Braintree a simple recurring billing solution bundled with a gateway that can process all the major card brands from anywhere in the world

PayPal also offers a simple recurring fixed billing solution that is very easy to set up and obviously comes fully integrated with your PayPal account. It is a great way to get started but it is not very flexible and can not manage complex pricing models.

Before your get started with a any solution we strongly advise that you spend time reflecting on the above questions about the vendor choice and the features you need. Then you should make a short list and test no more than three solutions. Don´t hesitate to leverage the free testing environments that all vendors should offer.

Once you’ve done all the above you’ll be able to integrate the right subscription and billing app with your business. That will help you to sell more, manage better your revenues and have a better customer retention rate.

Happy billing!

If you are an app vendor, you can list your solution in the fastest growing business software marketplace



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22 thoughts on “Which Billing and Subscriptions App to Choose for your Business?

  1. Lance Walley

    Thanks for including Chargify in your article!

    There are many choices, but we’re perhaps the only one that combines a full feature set + established company + small-business-friendly pricing + PCI Level 1 compliance.

    That combination is helping us grow quickly, adding merchants & developers every day, as well as a growing number of 3rd-party services and consultants.

    Thanks, again, for including us!

    — Lance Walley, CEO
    — Chargify

    Reply
  2. GetApp

    Wow, thanks for your nice words Lance. There is no decent article on subscription management without mentioning Chargify :-)

    Meg, you are correct in mentioning that CheddarGetter has its own payment gateway integrated.

    Thanks
    Christophe

    Reply
  3. Lance Walley

    Thanks for including Chargify in your article!

    There are many choices, but we're perhaps the only one that combines a full feature set + established company + small-business-friendly pricing + PCI Level 1 compliance.

    That combination is helping us grow quickly, adding merchants & developers every day, as well as a growing number of 3rd-party services and consultants.

    Thanks, again, for including us!

    — Lance Walley, CEO
    — Chargify

    Reply
  4. GetApp

    Wow, thanks for your nice words Lance. There is no decent article on subscription management without mentioning Chargify :-)

    Meg, you are correct in mentioning that CheddarGetter has its own payment gateway integrated.

    Thanks
    Christophe

    Reply
  5. Jessica_Rooney

    I really like CheddarGetter. It’s very easy to use (even for people who are new to billing…like me!), but its customization options are still powerful. I can also third the confirmation that it has it’s own payment gateway – it’s called the CheddarGateway, and it has all the components of the major gateways (PCI compliance, QuickBooks integration, real-time reports, integration API, multiple currency acceptance, etc.). However, CheddarGetter also supports integration with the other major gateways, including PayPal, PaymentExpress, Verifi, Authorize.net, and Network Merchants. This makes CheddarGetter flexible and good for many types of businesses.

    Reply
  6. Jessica Rooney

    I really like CheddarGetter. It's very easy to use (even for people who are new to billing…like me!), but its customization options are still powerful. I can also third the confirmation that it has it's own payment gateway – it's called the CheddarGateway, and it has all the components of the major gateways (PCI compliance, QuickBooks integration, real-time reports, integration API, multiple currency acceptance, etc.). However, CheddarGetter also supports integration with the other major gateways, including PayPal, PaymentExpress, Verifi, Authorize.net, and Network Merchants. This makes CheddarGetter flexible and good for many types of businesses.

    Reply
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  8. GetApp

    Yes I got a feedback last week from an ISV who went with CheddarGetter and he was very pleased with the ease of use

    Reply
  9. Pingback: What is the best variable recurring payments solution for an SaaS product that takes two base currencies? - Quora

  10. Pingback: SaaS subscription management software (Chargify, etc.) - what online accounting software to use with them? - Quora

  11. SimplifiedEcom

    Great Article Christophe, I think it’s great  that you mention how important it is to evaluate the TCO or Total Cost of Ownership for your subscription management provider(s).  Often it’s difficult to gain visibility on your total costs when you consider all the elements involved in payment processing and subscription management for todays SaaS and apps; merchant accounts, gateways, tokenized vaults, Affiliate systems…development and integration of customer interfaces (so they can cancel or upgrade). Also consider the overhead cost of the integration and administration of managing these various pieces and providers through the entire lifecycle of your business and how complex switching any of these providers can be.

    Focusing on the TCO, we’ve bundled and simplified these elements to make subscription billing ridiculously easy. You can get started quickly with no coding, switch merchant account providers in minutes and we offer customer data portability to support your business as you grow. 

    http://simpecom.com/lo96Yp   

    Reply
  12. Simplified Ecommerce

    Great Article Christophe, I think it's great  that you mention how important it is to evaluate the TCO or Total Cost of Ownership for your subscription management provider(s).  Often it's difficult to gain visibility on your total costs when you consider all the elements involved in payment processing and subscription management for todays SaaS and apps; merchant accounts, gateways, tokenized vaults, Affiliate systems…development and integration of customer interfaces (so they can cancel or upgrade). Also consider the overhead cost of the integration and administration of managing these various pieces and providers through the entire lifecycle of your business and how complex switching any of these providers can be.

    Focusing on the TCO, we've bundled and simplified these elements to make subscription billing ridiculously easy. You can get started quickly with no coding, switch merchant account providers in minutes and we offer customer data portability to support your business as you grow. 

    http://simpecom.com/lo96Yp

    Reply
  13. Pingback: What are the strengths and weaknesses of different SaaS billing service providers? - Quora

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