Chargebee vs Paddle: Which Recurring Payment Platform is Best for Your Business?

Recurring payments are the lifeblood of any online business. If you want to have a reliable, predictable income, having a frictionless way of collecting payments and preventing customer churn is essential.

Chargebee and Paddle are two companies offering payment processing and recurring billing features. They both offer invoicing, billing, and subscription management services, but which one is best suited to your use case?

Here, we'll explore the benefits and downsides of the two services, how much they charge, and how easy it is to integrate them with third-party platforms - helping you to make an informed decision about which platform could take your service to the next level.

Chargebee vs Paddle: What's the Difference?

Although both companies offer payment processing services, there are a couple of key differences. Here's an overview of the two services:

Chargebee offers several features for payment processing and recurring billing. It supports multiple currencies, free trials, trial extensions, termination fees, and other configuration options, enabling SaaS providers and other online entrepreneurs to tailor their pricing and billing systems in a way that suits their needs. Chargebee requires some effort to set up exactly the way you'd like, and you may need to use some plugins to get everything working as desired. Some business owners will see this as a benefit though, since the platform doesn't place many limits on what you can do.

In contrast, Paddle's focus is on simplicity. It offers a one-size-fits-all billing solution that is easy to hit the ground running with. Out of the box, users benefit from end-to-end subscription management, smart dunning features to help reduce user churn, automatic currency conversion, and localized pricing features. As long as you don't want to do anything that goes outside of Paddle's default offerings, you'll find it's easy to use. If you want more control, Chargebee could be better for you.

Now, let's take an in-depth look at both Chargebee and Paddle: starting with Chargebee.

What is Chargebee?

Chargebee describes itself as an end-to-end revenue management platform. It's aimed at businesses that use a subscription model and offers a full suite of tools to streamline the subscription experience for both customers and the business.

Who Can Use Chargebee?

Chargebee accepts businesses of all sizes, but the service is best suited to large or rapidly growing businesses that need a sophisticated set of tools. It supports more than 100 different currencies and can integrate with a huge number of popular payment gateways, enabling it to support payments in 150+ countries. It also offers global tax compliance tools.

If you're a small business, you might find the service slightly overkill for your situation, but if you opt to work with them, you can feel confident that the company will be able to grow with your needs.

How Does Chargebee Work?

Chargebee is a subscription management platform that you can integrate with your SaaS platform or other digital services. It offers a variety of options ranging from no-code tools and sending invoices, quotes, and payment links, to low-code billing options and a powerful API for more sophisticated needs.

Chargebee handles the whole billing and subscription experience, like full-page checkouts to help you improve your conversion rates, subscription ramps, dunning features to reduce churn, and even tools to provide metered billing if your project requires it. Some of these features can be utilized via plugins for your chosen store or app platform. Others require some coding work to get started.

The platform charges for transactions based on your monthly recurring revenue. However, smaller businesses don't have to pay a monthly fee, helping them kickstart their income in the early days.

Using Chargebee as Your Billing Solution

Getting started with Chargebee requires some technical knowledge. The platform does offer no-code solutions for some of its services, but more advanced features are hidden behind plugins or API integrations.

Let's take a look at how you can use Chargebee.

Getting started

Before you can start using Chargebee, you'll need an account! Simply navigate to the 'Sign up for free' button on the 'Billing' page to get started.

Then, enter your email - this has to be a business email, not a regular Gmail or Hotmail (or other) address. Once you've entered your information here, Chargebee will send you a verification email. Click this and you will be led to set up your account details.

Start by choosing a name for your Chargebee site.

Now choose what your goal is. We're going to pick 'streamline billing'.

The next page asks you to describe what type of business you have, so that Chargebee can recommend the right features. Here we will choose 'online services'.

Next, you're asked how you will accept payments - we have put 'payment links' as our answer here.

Finally, Chargebee uses this information to suggest a Chargebee plan. For our imaginary business, Chargebee has suggested the 'Starter' plan, which is free to use for the first $250k of payments!

At this point, Chargebee will ask for your Credit Card information - even if you are using a free plan for the time being.

Now, your account is ready, and it's time to make sure your account and billing plans are configured correctly. The admin panel contains a few important options for setting this up:

Set the billing currencies: Navigate to Settings > Configure Chargebee > Currencies > Add Currency to configure your base currency and any foreign currencies you'd like to accept.
Configure billing frequencies: You can configure billing frequencies at the site level. These can be overridden for specific plans or products. To set the site-level billing frequency, go to Billing > Product Catalog under the Configure Chargebee screen.
Manage plans and products: Chargebee uses the concept of product families to help you manage your product catalog. When you create an account on the platform, you should find it's already populated with some sample data so you can see how the catalog works. You can delete this data under the Test Site Data screen. You can then create new product families/add new products, and define pricing and billing plans under the Product Catalog screen.

Managing subscriptions with Chargebee

Before customers can subscribe to your business or product, you'll need to choose a customer onboarding method. For most businesses, the self-serve Chargebee Checkout will suffice. This has no-code options for payment links and low-code drop-in scripts that should be easy to add to most websites or apps, as well as several API integrations.

With those configuration steps out of the way, you're ready to manage the subscription options. Chargebee gives you granular control over billing. For example, you can set a common billing date for all your customers or have them billed based on the day they signed up. You can also choose whether the billing is a flat fee or based on the usage of your product. You can view all of your customer's subscription billing information under the 'subscriptions' tab with ease.

If you need to change the pricing of your products midway through a billing cycle, or you allow customers to cancel partway through, you might want to take advantage of the prorated credits and charges option to ensure your customer's bills are properly adjusted.

Invoicing customers

Just as Chargebee offers lots of control over when customers are billed, and how much for, you have lots of options for invoicing too.

For example, if a customer subscribes to multiple services and they all have the same renewal date, you have the option of sending out separate invoices or using consolidated invoicing to combine all the charges into one bill.

You can also customize the look and feel of the invoices, for example choosing how currencies are rounded and how exchange rates are shown for foreign currency transactions.

Revenue reporting

Chargebee handles taxes for you automatically and provides some useful on-platform tools to help you keep track of invoices that have been sent out, their amounts, and whether they've been paid yet. It also offers dunning tools to help prevent churn and some powerful analytics tools in the form of RevenueStory.

If you have more sophisticated reporting needs, you can export your data in CSV format and process it in your preferred analytics tool.

Payment gateways

To start charging customers, you'll need to configure a payment gateway. The company supports a long list of popular payment gateways covering over 150 countries. This list includes popular gateways such as:

Stripe
GoCardless
PayPal Express Checkout
WorldPay
Braintree

You'll choose Payment Gateways under Configure Chargebee to add your chosen gateways and follow the on-screen prompts.

How Much Does Chargebee Cost?

Chargebee offers three plan options. The Starter Plan has no monthly fee and is free for the first $250,000 of cumulative billing, with all future transactions charged at 0.75%.

The Performance Plan costs $599 a month for up to $100,000 billing, with transactions above that level charged at 0.75%. If you expect to handle higher transaction volumes, the Enterprise Plan may be a better choice. Pricing for this is on a case-by-case basis.

The above fees are for Chargebee only. Your chosen payment processors may charge an additional fee on each transaction.

What is Paddle?

Paddle is another subscription handling and billing automation platform. It offers a similar set of features to Chargebee but aims to be a more streamlined service.

Paddle operates as a merchant of record, so can handle all aspects of the subscription process, including taking payments. It's easy to integrate with your app or website and takes care of invoicing, billing, and taxes.

Who Can Use Paddle?

Paddle is aimed at online business owners and SaaS providers of all sizes. It offers easy integration with WordPress and WooCommerce through third-party plugins, and supports a large number of foreign currencies, making it suitable for international businesses.

How Does Paddle work?

Two main things differentiate Paddle from Chargebee. Firstly, Paddle acts as a merchant of record, so there's no need for an external payment processor. Secondly, the platform aims to be as easy to use as possible. You do need some technical expertise to configure Paddle's plugins, but the learning curve isn't as steep as with Chargebee.

Using Paddle for Payments

If you choose Paddle as your subscription platform, you'll need a website or app that's secured by HTTPS. This is something most hosts offer as standard today, but if you don't have an SSL certificate, you'll need to get one before you can set up Paddle.