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Build the Right Payment Stack for Your SaaS

B2B paymentsSaaS FinanceAccounting and Software

Clémentine d'Arjuzon

Sep 14, 2022


What software do you need to process SaaS payments?Payment gateways: what your customer sees firstSubscription management tools: what your customers will use for payments during their lifecycleKey takeaways

Payments are crucial for any business. Your payment choices will impact your organization, recruitment, and processes. Choose only paper checks and your accounting team will spend time on manual tasks. Choose only digital solutions and you might cut yourself off from enterprise-size companies.

Complexity reaches another level when you’re a B2B SaaS. SaaS payments can be a real challenge. Why? Because SaaS businesses blend in many different factors: different pricing plans, subscription-based models, recurring payments, high volumes of invoices, etc. 

On top of that, a big part of client churn in SaaS stems from involuntary churn. Involuntary churn is predominantly linked to issues with payments: failed payments on your payment gateway, wrong banking information, etc.

Choosing the right payment stack for your SaaS payments is therefore paramount: if you’re not careful, you might lose clients without even noticing it. 


  • What type of software do you actually need? 

  • How should you choose the right solutions for your SaaS?

Read on to get the answers to all these questions and more.

Upflow offers several online payment options for your SaaS payments and helps you get paid on time with personalized dunning emails and extensive analytics. Give it a try!

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What software do you need to process SaaS payments?

Let’s start at the beginning. What do SaaS payments imply and what type of tailored solution do they need? Let’s check out the different steps and actors involved.

  • First, your customer chooses the payment plan he wants and payment method. He does so on a payment gateway. In the background, the payment processor handles the communication between your bank and his bank and sends back the information about payment approval or denial via the payment gateway.

  • Then, he enters his billing information so you can charge him each month (or trimester, year, etc). This happens on his merchant account, usually on the same platform as the payment gateway.

  • Eventually, you need a subscription management system to take over recurring payments and keep your customers happy.

💡 Good to know: what’s the difference between a payment gateway and a payment processor?

Payment gateways go hand in hand with payment processing software: today, more and more payment gateways offer processing services all-in-one. 

A payment gateway communicates the approval or decline of transactions. Payment processors work more behind the scenes: they transmit data securely to the different parties from the beginning of the process to the settlement of funds on bank accounts.

In a way, they act as an intermediary between your bank and the bank of your client.

Payment gateways: what your customer sees first

The payment gateway is the interface between yourself and your client. It’s where he’ll choose his subscription options and different pricing plans. As such, it should offer a very simple customer experience as well as total security. It should also feature all the payment options and methods that you’ve chosen for your business (ACH, credit card, debit, etc).

What criteria should you consider when selecting a payment gateway?

To choose the right solution, you should consider the following criteria: 

  • User experience: choose software that is intuitive and easy to use to offer an effortless experience to your client. The simpler it is to pay you and the fewer steps there are, the better. 

  • Local compliance: you should take into account your geographical situation and currency needs  If you’re an international SaaS, for example, you might prioritize software that handles many different currencies.

  • Security standard: needless to say, security is crucial when it comes to payments. You’ll be handling sensitive customer data like card details, and should check the security certifications of the solutions you’re considering to make sure you’re not taking any risks. 

  • Customer service: knowing you have someone on the other end of the line in case of an issue is important, especially when dealing with sensitive activities like payments. Make sure you’re comfortable with the level of customer service you’ll be getting.

  • Pricing: it’s obvious that pricing plays a role in choosing software. However, keep in mind that you’re choosing not only for today but also for your future needs. You might want to go for the cheap solution thinking it will save you money on the spot, but it will actually cost you more money - and time - to change further when you’re handling a higher volume of transactions.

What are the best payment gateways on the market? 

Some of the best solutions for B2B SaaS on the market are:

  • Stripe: Stripe Payments has the advantage of offering an all-in-one payment solution with payment processing as well as many customized options. It handles more than 100 currencies without charge and offers advanced security features like the SCA (Strong Customer Authentification). Their software also meets the PCI DSS standards. Regarding pricing, there are no monthly charges: you pay a percentage for each transaction. Keep in mind that fees are higher for non-EU cards, making it an easier choice for SaaS-based in Europe. 

  • PayPal: Paypal has been a payment leader for more than 20 years now and handles around 25 currencies. They place a big focus on security and have a specific security program both for merchants and customers. Registration is free, and your fees will depend on the volume of sales and the region you make business in. However, PayPal has been known for being difficult to reach in case of a problem, so keep that in mind before making your choice. 

  • Braintree: Owned by Paypal, Braintree is adapted to e-commerce as well as SaaS merchants. They are present in many different countries and offer flat fee prices without adding heaving charges per transaction. They also have subscription management features.

Subscription management tools: what your customers will use for payments during their lifecycle

Your subscription management platform takes over once your client is onboarded and handles all your recurring billings, once the first payment is made via the payment gateway.

It will ensure customer satisfaction and renewal. It is crucial to choose software tailored to your present and future needs. Keep in mind that some subscription management tools also offer payment gateways, making them all-in-one solutions. Sometimes, payment processing is included in the subscription management software, sometimes it is not. 

You might be tempted to build your own in-house software: don’t. Using a third-party company - that is an expert at what they do - is the better answer for many reasons. First, it’s their job and they have the resources that you might not have. Second, it’s their only job, meaning they will be 100% available to handle bugs and issues which probably won’t be your case.

What criteria should you consider when selecting a subscription management tool?

To choose the right solution, you should consider the following criteria and features: 

  • Customer Lifecycle Management: 

    • How easily can your subscribers pause or cancel their subscriptions?

    • What options exist to implement setup fees and payment plans? 

    • Are trial period discounts and coupons supported?

  • Billing Models: which payment frequencies (monthly, yearly, etc) are supported? Once again, take into account your future payment needs: you might be billing monthly for now but who knows how you’ll bill in the future. 

  • Design and customer experience: once again, it’s crucial to make the experience as effortless as possible for your customers. It will reduce churn and increase loyalty and satisfaction. So,

    • How easy is it for customers to check out?

    • What is the design like along the customer journey?

    • How is the customer support? Can you easily reach out and get a quick answer?

  • Compliance: just like your payment gateway, you should make sure the tool you select respects the GAAP and/or IFRS, complies with local taxes, and recognizes deferred revenue. It should also streamline revenue recognition.

  • Third-Party Integrations: Choosing a management subscription software that connects with third-party software ensures all your stack - from CRM to A/R collecting - works seamlessly together. It’s crucial to take that into account, not only for your subscription management tool: for example, our AR solution, Upflow, integrates with various billing systems like Chargebee and Quickbooks.

  • Analytics: most subscription management platforms offer very extensive analytics dashboards that can be useful to understand how your business is going. Make sure the KPIs you need are on there.

What are some of the best subscription management tools on the market?

It’s easy to get lost with all the tools and software that exist. Let’s review together the most popular subscription management software and how they can help you manage your SaaS payments.

Stripe Billing: As explained before, Stripe was originally just a payment gateway. It has extended its features to subscription management. It offers many perks, among which are many integrations, a powerful API, and an instant set-up.

Some of its main features are:
- Supports various pricing plans and models (usage-based, tiered, etc).
- A convenient direct connexion with their Payment Gateway.
- Efficient and easy-to-reach customer support.

Pricing goes is usage-based and goes from 0.5% to 0.8% on recurring payments. Pricing can be discussed with sales for entreprise size businesses.

However, it caters to a vast audience (it’s also very handy for e-commerce) and lacks some more advanced features that SaaS companies might look for. It’s a good choice for companies looking for convenient software.

What we think: The big plus is that it’s free until you reach a certain revenue and offers full synergy with Strip Payments, used very widely today in B2B businesses. On the other hand, once you start growing fast, it can get expensive pretty fast. Keep aware!

Chargify: specialized in B2B SaaS, Chargify offers endless personalization features and is very convenient for SaaS with complex billing plans.

Some of its main features are:
- Supports different pricing models and add-ons.
- Specific marketing functionalities like targeted promotions and discounts.
- Flexible billings: you can personalize your billing workflows to the maximum.

Pricing is 3-Tiered and goes from $599/mo to $3,499/mo with percentage overage.

Chargebee: widely popular, Chargebee is an all-in-one platform for subscription SaaS. It connects with more than 30 payment gateways and is particularly adapted to businesses that intend to scale and grow exponentially from startup to enterprise. It’s also very secure, with SOC-1 and SOC-2 certifications.

Some of its main features are:
- Subscription management for the entire client lifecycle.
- Many marketing features and resources to customize communications.
- Specificities for more than 150 countries.
- Add-ons for tax compliance and payment gateways.

Free until the first $100.000 of revenue, it offers 2 tiered plans ($249/mo - $549) and an enterprise plan on request.

What we think: Chargebee strikes the right balance between coverage of use cases and easy implementation and customer experience.

Zuora: tailored to enterprise-level SaaS and offering a premium experience, Zuora is considered by some as a great solution for established businesses that want to switch to a subscription model.

Some of its main features are:
- Maximum customization for billing cycles.
- Various third-party integrations (Upflow for example).
- Real-time communications with clients thanks to emails, text messages, and notifications.
- Advanced and comprehensive dashboards.

Pricing is on-demand, confirming the more upper-market positioning of Zuora.

What we think: Zuora is a great tool to handle more complex transactions however it does take some time to set up and will require someone full-time to keep it running.

In addition to payment gateways and subscription management tools to handle your SaaS payments, implementing AR software will help you get even better visibility of your payments. AR software helps your SaaS business get paid on time. Solutions like Upflow automate your payment reminders and feature detailed receivables analytics like DSO or aging reports. With Upflow for example, you’ll be able to understand who pays you on time, and who doesn’t. You can also offer several payment methods to your customers: card payments, ACH, direct debit, etc. Because let’s face it: the easier it is to pay you, the quicker your customers will pay you.

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Key takeaways

  • Because of the complexity of SaaS payments, it’s crucial to have the right payment tools and software.

  • Two major software are involved in SaaS payments: payment gateways - the first payment and contact your client will ever have with your business - and subscription management software - the way your client will pay you for the rest of his lifecycle.

  • When choosing the right tools, consider the features you need now and will need in the future once your business grows and has more transactions.

  • Some of the criteria to take into account before selecting your software are customer experience, third-party integrations (to billing solutions, CRM, etc), user experience, currencies, local compliance, security, pricing, etc.

  • Some of the best payment gateways on the market are Stripe, PayPal, and Braintree. Regarding subscription management tools, you can check out Stripe Billing, Zuora, Chargify, Chargebee, and others.

  • Upflow helps you understand your SaaS payments better by giving you an overview of key AR metrics.


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