Comparison of the 7 Best SaaS Payment Processing Services

You've come up with an amazing idea for a SaaS startup. After sleepless nights, you're almost ready to present your creation to the world. Only one question remains: how to process payments?

In the good old days, buying software was no more complicated than buying a bag of bagels. You pay for a CD with the program, you get a CD with the program installer.

And then came the SaaS subscription model, allowing software to be sold in exciting, whirlwind, granular ways.

Instead of selling a single unit, you sell a service for a month. Now you need to collect recurring payments for multiple pricing tiers, work with bank cards from many countries and currencies. Between the moment the customer pays you and the moment you receive the money, a host of new events occur.

Let's look at how payment processing works in SaaS to better understand what features we are looking for in our top subscription billing systems.

Components of Payment Processing in SaaS

The main part of the payment process takes a few seconds, covering many dramatic moments and a long list of involved parties. Let's briefly name them.

Customer, the person who believes the product is worth its price and clicks the 'buy now' button.
SaaS company. That's you and your business selling a product worth buying.
Website or application, where UX/UI designers placed the 'buy now' button on the pricing page.
Merchant account - a bank account that receives your customers' transactions when they pay for a subscription.
Acquiring bank - the bank that provides you with a merchant account and processes transactions on your behalf.
Issuing bank - your customer's bank that provides them with a payment card and processes transactions on their behalf.
Payment gateway - the link between the customer, you, and your banks.
Subscription management system. From the first purchase, it automatically bills customers on a recurring basis and handles all the intricacies of complex multi-tier billing.

Assume the customer and merchant exist, and the issuing bank is the customer's concern. So, we need to find an acquiring bank that provides us with a merchant account, find a SaaS payment gateway, and a subscription management system to make everything work.

How to Choose a Payment Processor for SaaS

It seems that SaaS payment processing is a complex business process. The emergence of a new complex business process is a sure sign of a new B2B market that will put out this fire.

Over the past 15 years, dozens of recurring payment processing services have emerged. Such a multitude of possible solutions to the billing problem has created a completely new problem.

The problem of choosing a payment processor.

You look at Google search results. Countless competitors stare at you from their landing pages, designed to steer your choice in diametrically opposite directions. Your heart pounds, your hands sweat, colorful logos flash before your eyes.

It's tempting to grab the nearest payment processing app, thinking we'll just switch later. But moving between billing systems that store all subscription data, credit card details, and unpaid invoices is difficult, risky, and expensive.

Comparison of Online Payment Processing Services

The list of payment processing services can be roughly divided into two categories:

All-in-one services that include a payment gateway, merchant account, and to some extent subscription management;
Services that provide exclusively and completely SaaS subscription management.

Full-featured services like Stripe or Braintree are great for startups with simple recurring billing and a few pricing tiers. But as a SaaS pricing strategy evolves, its billing system evolves too. All-in-one applications often become insufficient when you start working with new market segments, entering new regions, and experimenting with pricing plans, upgrades, and billing frequency.

In cases where SaaS companies feel that their all-in-one payment processing system is holding them back, they implement a specialized SaaS subscription platform, such as Recurly or Chargebee, on top of services that provide them with a merchant account and SaaS payment gateway.

As a result, they get better reporting, full subscription management, and greater flexibility for various pricing strategies. For example, if you offer usage-based pricing, user-based pricing, or numerous hybrid tiers, a specialized SaaS subscription management platform can handle billing for any of them.

Stripe Recurring Payments: Easier Than Ever

Stripe is a leader in the SaaS billing system market thanks to its simplified setup process and integrations with almost all applications. It acts as a payment gateway, merchant account, and subscription management system. Additionally, it includes built-in analytics tools to monitor MRR, churn, and other SaaS metrics.

Stripe charges 2.9% per transaction, plus an additional 1% for international cards and currency conversion, and that's what annoys people about Stripe. For startups, the prices may seem acceptable and are quite in line with the industry, but as you scale, the fees quickly add up.

Braintree Payment Processing as an Alternative

Braintree is a PayPal project created to compete with Stripe and has a fairly similar feature set. Like Stripe, Braintree charges 2.9% per transaction, plus 1% for international cards and currency conversion. However, unlike Stripe, Braintree (unsurprisingly) offers PayPal payments.

Another unique feature: Braintree allows you to use its gateway services even if you are already tied to another payment processing account.

Flexibility of the Authorize.Net Payment Gateway

Authorize.Net is a payment gateway by Visa that does not provide a merchant account as part of its services, so you can integrate Authorize.Net with an existing merchant account if you already have one. With Stripe, for example, this option is not available.

But if you need help with a merchant account, Authorize.Net can provide one through one of its resellers for an additional fee - the cost per transaction will be 2.9%, plus 2500 rubles per month as a gateway fee.

2Checkout - Recurring Payments for Global Business

Although all companies in our list handle international transactions, 2Checkout (now Verifone) stands out for its ability to accept payments globally. It operates in over 200 countries and supports over 45 payment methods - from the most popular credit cards, online wallets, and PayPal to regional payment systems.

If you are an international brand looking for a payment processing service with maximum global reach, consider this option.

Chargebee Subscription Management for B2B SaaS

Chargebee is a SaaS subscription management platform that does not provide a merchant account or payment gateway. It is a highly specialized SaaS tool that offers more capabilities for managing recurring billing than all-in-one tools like Stripe or Braintree. Chargebee is known for numerous options for price optimization, upselling, revenue recognition, trial management, and other SaaS-specific features.

The only one in our list, Chargebee offers a kind of freemium pricing - for the first 10 million rubles of revenue, you pay nothing. After that, you pay 29,900 rubles per month with monthly revenue up to 5 million rubles. No percentage of revenue is charged until you exceed the set limit.

Chargify Recurring Billing System for B2B SaaS

Chargify is a SaaS subscription management tool that helps automate recurring billing and does not include a merchant account or payment gateway, like Chargebee. However, from within Chargify, you can use gateways like Stripe, Authorize.Net, and a dozen other providers.

The company positions itself as a SaaS-specific service and offers great flexibility in billing scenarios. It is suitable for any trials, billing frequencies, targeted promotions, and one-time payments. 'If you can imagine it, we can bill it,' says the Chargify website.

The service has a free trial and the most expensive price in our list - monthly subscription starts from 59,900 rubles with revenue up to 7 million rubles per month. For comparison, Chargebee costs only 29,900 rubles per month.

Recurly Subscription Management for Reducing Customer Churn

Recurly is another subscription and billing management platform, roughly similar in capabilities to Chargify and Chargebee, targeting SaaS, mobile, content, and publishing companies worldwide.

According to Recurly representatives, their dunning system and churn reduction features increase monthly revenue by an average of 12%. Recurly offers a free trial and charges 14,900 rubles plus 0.9% of revenue for the Core pricing tier.

When You've Chosen the Ideal Payment Processing Service

We would like to conclude this article on SaaS payment processing services in a way that some might call a professional deformation of a design agency.

Put effort into the checkout design to make it pixel-perfect.

Indeed, if you have a UI/UX hammer, all problems look like nails that need to be properly designed. But if only you knew how many people leave in the middle of checkout due to one extra step or a slight payment glitch!

This is the very last step in the customer journey, and if your customers cannot quickly and correctly enter payment information, all your previous marketing and sales efforts will be in vain.