SaaS billing software automates one or more of the various aspects of the recurring billing process — payment processing, fulfillment, dunning, and more.
In this piece, we’ll be comparing 7 SaaS billing solutions that we separate into three categories:
- Subscription management: This type of software lets you automate free trials, recurring payment schedules, and the dunning process. You’ll still need a separate solution for payment processing, taxes, chargebacks, and more.
- Payment processing: These solutions gather payment details and facilitate the transaction between two parties. With many payment processors, you’ll need additional software to manage complex recurring payments, taxes, chargebacks, dunning, and more.
- Merchants of Record (MoR): Having your billing solution also act as the MoR means they take care of the entire SaaS billing process for you, including collecting and remitting local and international taxes (such as VAT and local sales tax), staying compliant with local laws and regulations, chargebacks, and much more. Without a MoR, your company will have to keep track of and ensure compliance with all local taxes and regulations in any country or region where you have customers.
Table of Contents
- FastSpring: Your MoR for All-in-One SaaS Billing
- 3 Subscription Management Software
- 3 Payment Processors
FastSpring handles everything from subscription management to international payment processing for SaaS companies. If you think FastSpring could be the right SaaS billing solution for your business, sign up for a free account or request a demo today.
FastSpring: Your MoR for All-in-One SaaS Billing
Here’s an overview of what it looks like for FastSpring to act as your MoR:
Your customers visit your website to select their software subscription plan. Then, when they go to checkout, FastSpring takes over the process and completes the transaction. It works just like most other common SaaS payment processors except for one important feature: Fastspring acts as your merchant of record.
The benefit of this is twofold:
- FastSpring relieves you of the burden of paying local consumption tax, staying up to date with local transaction laws, managing subscriptions, payment processing, and more. If something goes wrong with taxes, local compliance, chargebacks, authorization rates, etc., FastSpring takes the lead to solve the issue on your behalf.
- Your entire SaaS billing solution can be handled from one place — your FastSpring dashboard. Plus, you’re only charged one flat rate for all services (more on this later).
Next, we’ll take a closer look at how FastSpring helps you with each piece of the billing process. Specifically:
- Payment Processing
- Collecting and Remitting Consumption Tax
- Subscription and Recurring Billing Management
- Retention Management
- Analytics and Reporting
Checkout: Full Checkout Customization for Higher Conversions
Many companies lose potential customers because there’s too much friction in their checkout process. For example, if the checkout screen doesn’t visually match the branding of the rest of the website, the potential customer is less likely to trust that the checkout is secure. Or, a customer may decide not to buy because you don’t accept the type of payment method they have available (a problem especially common with international customers).
Most payment processors will provide you with checkout templates and allow for a few simple customizations such as adding your logo. However, these checkout templates rarely provide the customization abilities you need to truly optimize your checkout for high conversion rates.
Here are a few other features that FastSpring offers to help you optimize your checkout:
- Preferred payment methods: While Visa or PayPal may be common in the U.S., other forms of payment are popular in other countries. If you don’t offer the preferred payment method that buyers are used to, you’ll convert fewer of them to customers. But it can be very time-consuming and a drain on resources to add new payment methods. FastSpring makes it possible for you to add tons of preferred payment methods around the globe right away (more on this in a later section).
- Text translations: If your checkout isn’t in the same language as the rest of your website, you may lose some customers. With FastSpring, you can let customers choose their preferred language at checkout or let FastSpring choose the appropriate language based on their location.
- Local currency conversions: Some customers will be unwilling to purchase if they don’t know (or have to figure out for themselves) what the software will cost in their local currency. FastSpring solves this by automatically converting the price to the local currency at checkout. Alternatively, you can set a custom price for each currency.
- Personalized assistance: If you need additional support, our team of software engineers can help design and develop the right checkout for your business (regardless of how big or small your business is).
Note: We also provide a checkout template that has been optimized for conversions, however, many businesses find that it’s easy to implement a custom solution with FastSpring.
Payment Processing: Increase Authorization Rates With Localized Payment Gateways
Frequently, customers try to buy but the payment method gets declined or takes too long to complete so they don’t follow through with the purchase.
FastSpring helps improve authorization rates so you can earn more revenue in several ways:
- Payment gateway rerouting: If a payment fails on the first attempt, FastSpring automatically retries the payment using a secondary gateway — all without you or anyone on your support team having to intervene. This often solves payment failures due to connectivity or system issues.
- Managing preferred payment providers: As we mentioned earlier, supporting new payment methods can be a huge drain on resources. Each card network and issuing bank has different tolerance levels for fraud and chargebacks and different rules for how a transaction takes place. If you aren’t in compliance with these requirements, the card network will likely stop authorizing payments. FastSpring takes on the responsibility of staying compliant with various payment providers which means we handle fraud, chargebacks, and more for you.
- Localizing payment processing: Card networks are more likely to authorize payments sent through a local payment processor. For example, if the buyer is in Italy, the payment processor should have a legal entity in Italy for higher authorization rates. FastSpring works with payment processors around the globe to ensure the majority of payments are localized.
Collecting and Remitting Consumption Tax: Expand Globally Without Hefty Fines
In the past, many countries didn’t require consumption taxes on digital goods. As a result, SaaS businesses didn’t need to worry about collecting and remitting consumption taxes, however, that’s no longer the case. Additionally, VAT and sales tax are almost always calculated based on the location of the customer, not the location of the business. This means that SaaS companies not only have to collect VAT and sales tax, but they also have to learn the tax laws for each and every jurisdiction that their customers live in.
Some SaaS billing software will help you collect tax but, ultimately, you’ll be responsible for collecting and remitting the correct amount at the right time. This is a huge task for any business.
Because FastSpring acts as your MoR, we handle all aspects of collecting and remitting consumption tax for you.
FastSpring automatically calculates the right type and amount of tax and adds it to the customer-facing price at checkout (we also support tax-exempt transactions and other special cases). At the end of each tax period, we file taxes with each jurisdiction. We’ll also take the lead in audits.
Subscription and Recurring Billing Management: Create Custom Trials and Subscriptions While Staying Compliant With Local Jurisdictions
There are many subscription management software available that offer flexible options for creating trials and recurring subscription plans. With the right trial and recurring billing model, you can win more customers and increase revenue.
However, your subscription plans will only be successful if they adhere to local laws and regulations. For example, many states, provinces, and countries don’t allow auto-pay for transactions over a certain amount.
Most subscription management solutions will notify you when they learn about changes to laws and regulations, but you’re ultimately responsible. If you don’t adhere to these ever-changing laws and regulations, you could face heavy fines or be prevented from transacting in that region.
FastSpring relieves you of this burden by taking full responsibility for adhering to local transaction laws and regulations.
Our team of legal experts stay up to date on all relevant legalities and make sure all the necessary procedures are in place for collecting payments. You can start selling in 200+ regions almost instantly because we’ve already established the necessary processes in each region.
Additionally, FastSpring has a variety of pre-configured trial and subscription options so you can create custom solutions without code. Or, you can use the API and webhooks library to build complex subscription logic and integrations.
Here are a few examples of the types of trials and billing logic you can create with FastSpring:
- Free or paid trials
- Trials with or without collecting payment details
- Trials that automatically renew to a paid plan
- Subscription intervals of any length
- Prorations mid-cycle
- One-time purchase added to a recurring payment
- Upsells, cross-sells, discounts and more
Retention Management: Reduce Involuntary Churn With Proactive Dunning
Since involuntary churn is one of the main ways subscription-based companies lose customers, most SaaS billing software offers basic retention management features such as retrying failed payments or email notifications sent to customers after a failed payment. However, these features are only helpful after a payment has failed.
FastSpring lets you turn on proactive notifications that remind the customer to update payment details before the transaction takes place. In our experience, these proactive reminders can significantly reduce the number of payments that fail in the first place.
Once a payment has failed, you can choose to automatically send out reminders two, five, seven, 14, and 21 days after a payment failure. During the 21 days, your customer’s service won’t be disrupted. By sending out frequent reminders and continuing the service, customers will be more likely to update their information which reduces involuntary churn.
FastSpring provides a self-serve portal where your customers can update their information and upgrade or downgrade their subscriptions. By letting customers manage their own accounts, there’s less friction in the customer experience which means more revenue. The self-serve portal can be customized to match your brand identity but it’s managed by our team so your team doesn’t have to worry about it.
Analytics and Reporting: Simplify Business Decisions
FastSpring’s analytics and reporting feature lets you understand how each product contributes to your bottom line, what coupons or promotions are working, which subscription models generate the most revenue, and much more.
The revenue overview dashboard gives you a complete overview of cash flow, including:
- Where your customers are located
- What currencies and payment methods customers prefer
- Net sales by product
- Total transactions by country
- And more
The subscription overview dashboard lets you dig deeper into your monthly recurring revenue (MRR) and includes SaaS metrics, such as:
- Upsells, cross-sells, and add-ons
- Long-term value of each customer
- Total customer churn
- When in the billing cycle churn happens most often
- And more
With FastSpring’s reporting feature, you can create and save custom reports which allows you to have the data you need, when you need it. Our team can help you use these reports to find the answers you need to grow and optimize your SaaS business. Finally, you can share any report with key stakeholders via the FastSpring dashboard or as a CSV, PNG, or XLSX spreadsheet export.
SocialBee Case Study: Learn how SocialBee doubled its MRR with FastSpring.
Plan for the Future With Flat-Rate Pricing
With most SaaS billing software, you’ll need to add on other software solutions or upgrade to the most expensive plan to get the functionalities you need.
On the other hand, FastSpring is a complete payment solution so you won’t need any additional billing software. Plus, all of FastSpring’s services are included in one flat-rate price (without any migration fees).
Our team works with you to find an affordable price based on the volume of transactions you move through FastSpring, and you’ll only be charged when transactions take place.
3 Subscription Management Platforms
Chargebee: Built for Complex Subscription Logic
Chargebee is a popular choice for subscription billing and revenue management. Chargebee supports several payment types and payment gateways, however, you’ll be responsible for partnering with and configuring each one.
Some of Chargebee’s features include:
- Self-serve and automated subscription models
- Automated billing and invoicing
- Flexible pricing plans
- Quote management tool
- Smart dunning
- PCI-compliant checkout
Chargify: Subscription Management for B2B SaaS
Chargify is subscription billing software built specifically for B2B SaaS. At the time of writing, Chargify is in the process of partnering with SaaSOptics to become a new software company, Maxio. Through this partnership, Chargify customers will have access to payment gateways, however, you’ll still need a separate solution for taxes and legal compliance.
Other notable Chargify features include:
- Dozens of trial and pricing models
- Custom sign up experiences
- Automated dunning
- Self-service analytics suite
- Revenue recognition
Recurly: Supports Multiple Payment Gateways
Recurly is a subscription and billing platform for optimizing your growth strategy. Recurly advertises the ability to easily integrate with various payment gateways and merchant accounts, however, you still have to manage and pay for these third-party services on top of your Recurly plan.
Recurly’s offerings include:
- Customizable subscription models
- Automated recurring invoicing
- Revenue recovery tools
- Intelligent retention
- Subscription analytics
3 Payment Processors
Verifone: Payment Platform for Enterprises
Verifone (formerly 2Checkout) lets you choose between a MoR model and payment processing model. Although startup companies may be able to use their services, Verifone is geared more toward large enterprises.
Verifone’s main features include:
- Reporting and analytics
- Global tax and financial services
- Risk management and compliance
- B2B quote builder
- Channel partner management
Stripe: Well-Known Payment Processor
Stripe is a payment processor for online and in-person transactions. Although Stripe offers a few subscription management features, they often recommend integrating with Chargebee for more robust recurring billing features — which means you’ll have to manage and pay for two platforms.
Some of Stripe’s other features include:
- Fraud and risk management
- Online payments
- In-person payments
- Subscription management
- Virtual and physical card issuing
- Subscription business spend management
Braintree: PayPal’s Solution for SaaS
Braintree by PayPal is a payment processor that supports Venmo (in the US), Apple Pay, and Google Pay. They also offer some SaaS subscription management features.
Other notable offerings by Braintree include:
- Merchant accounts
- Optimized checkout flow
- Flexible risk mitigation options
- Analytics on the subscription lifecycle
- Third-party integrations for recurring billing, accounting, and more
FastSpring is more than just billing software — we’re your Merchant of Record. If you’d like to learn more about how you can manage subscription billing, payment processing, and more from one platform, sign up for a free account or request a demo today.