Subscriptions: Braintree vs. Chargify/Recurly, etc.

[tgiles]

The US-based internet company I co-founded is getting ready to expand to a more typical SaaS setup and include paid monthly/yearly, tiered account plans. We plan to include automated recurring billing. Currently we do our basic banking through Wells Fargo, and do not have a Merchant Account (or payment gateway) established.

While doing research on the best options for this whole process I read a lot of articles on HN and elsewhere. What I found is that there does not appear to be a concrete consensus on the best options. The only thing people seem to agree upon is that it is best not to create your own account plan and recurring billing management setup. I couldn't agree more due to the complications, security issues, and overall time investment.

Currently, two main options are leading our discussions:

1. Braintree (http://braintreepaymentsolutions.com/) for our payment gateway, merchant account, and recurring billing. The features described for their recurring billing fit our needs (and more) and the overall prices of using Braintree for everything, while correctly described as "Premium" by others here on HN, appear competitive with Authorize.net + WF merchant account + Chargify/Recurly for recurring billing. We like Braintree's in-depth and extensive support, docs, and dev resources. And we "think" we like the fact that everything (payment gateway, merchant account, and recurring billing) are tied into one system so we don't have to try to work with three separate entities to work out issues.

2. Third party payment gateway, third party merchant account, and Chargify/Recurly for recurring billing. This option has the proposed benefits of potentially reducing overall costs and separating the components, which may make future changes to individual components of the overall setup easier. For a third party payment gateway we're considering Authorize.net. Third party merchant accounts are a little bit of a tougher decision, but we've considered simply going in house with Wells Fargo to reduce complications or another organization such as SVB.com.

At the moment we're leaning towards Braintree. One reason for this is its benefits (ease of setup going through a single company, extensive dev resources, competitive cost, quality customer support) outweigh the benefits we can come up with for the other option(s).

Does anyone have experience in this field and suggestions on the matter? Does it make sense to use Braintree for everything, or are there other benefits of going with separate entities for the payment gateway, merchant account, and recurring billing that we are overlooking?

[priv_acy]

I just went through this. I integrated Chargify, intending to use it with Braintree. Oops. Chargify doesn't yet support Braintree's new API (which I discovered after getting a merchant account with Braintree). So I dropped Chargify and redid everything with Braintree's API.

Braintree's API is pretty darn good. But it's not up to Charigfy's standards. Chargify has some pretty great features that are really simple to implement (like metered billing, and others of similar complexity). Not going with Chargify has slowed down my iteration speed when it comes to billing changes. It's just not as easy to do certain things when you have to write all the code yourself.

That said, you can do a lot with Braintree, and their customer support is fantastic. Their API is continually being improved. I also have a slight sense of relief that I won't be dependent on Chargify. Chargify, as we know, is a startup in search of a long term business model, and there are no guarantees that they'll be able to do what I need 6 months from now. But that security comes at a price - writing my own code.

What I would not do is use Chargify with a gateway with a crappy API. If something happens to Chargify, you could be stuck using something horrid.

In the end, most of what you get with Chargify is increased development speed if your billing gets complicated. But I wouldn't sweat the decision too much. It would be nice if Chargify supported Braintree V2 - as you'd have the best of both worlds.

[cmer → priv_acy]

"Chargify, as we know, is a startup in search of a long term business model"

I don't think this argument is valid. They already have a business model and currently implement it: they charge for their product. They might not become profitable with their pricing, but I feel like the way they are doing it is a valid and fair monetization model.

[jeffepp → priv_acy]

Prophetic. Now that the prices have changed I think we are going to jump ship on principle alone.

Ahoy..

[priv_acy → jeffepp]

I still like the service, and I think they're getting a bit of a bad rap - they have a business to build, and this is the best way forward for them. Did anyone really think that such a great service would be so cheap forever?

But yeah, had I stuck with them at the beginning, I'd be madly coding to get rid of them now, as I can't justify the cost at this point in my business.

I bet in the long run, this will be seen as a good and bold move for Chargify, though.

[ABrandt]

I've done a good amount of research in this space and I don't think I could be more emphatic when I say go with Braintree. In one way or another, just about every payment provider I've come across has this underlying "we're going to screw you" feel to it. With Braintree's emphasis on education and openness, I just don't see it with them. What may cost you slightly more now will save you boatloads down the road.

[tgiles]

As I've continued my research, talked to representatives and users of all the initially mentioned services, I definitely agree with both of your comments ABrandt and damoncali. Braintree and Chargify seem to be leading the pack. Chargify has a more feature-rich, and developed recurring billing platform than Braintree, but Braintree has a lot of other benefits and seem to be quickly expanding their recurring billing quickly.

If we already had a merchant account or payment gateway Chargify would definitely be the right fit, but I too am apprehensive about their longevity. It remains a tough call, though, since the field still feels in infancy with no clear winners. At the moment it feels as if we're leaning towards Braintree, which appears to be more secure in the long term, professionally managed, and offers a nice set of quickly growing features to their already rock-solid service. Next step will be to start playing around with both platforms and see if either one stands out in practicality.

[tgiles → tgiles]

As a result of how Chargify handled their price and policy changes (http://news.ycombinator.com/item?id=1780348) we are no longer considering them as a viable option. Regardless of whether they're cheaper, have better features, etc., the fact that they would make this change without any real warning to their existing customers is beyond sketchy. I'm pretty much amazed that they did this without at least emailing their existing customers a few weeks in advance to prepare and warn them before making the public and official switch. If they are the type of company that would do this, what else would they do? Not worth the risk in my opinion.

[jread]

I'm having the same dilemma with a SaaS startup. Up until now we've been using Quickbooks online's gateway and recurring payments capabilities, but the process of setting up new payments is manual and tedious and we want to go with more of a self serve model.

We are considering Braintree and Authorize.net's ARB. Another option is PayPal's Website Payments Pro gateway service. Here is a comparison of the two:

PayPal Website Payments Pro w/Recurring Payments: Discount Rate: 2.9% $0-3k; 2.5% $3k-10k; 2.2% 10k+ Transaction Fee: $0.30 Monthly Fee: $30/mo Recurring Billing Fee: $30/mo Monthly Minimum: $0

Braintree: Discount Rate: 2.29% qualified; 2.89% non-qualified Transaction Fee: $0.30 Monthly Fee: $35/mo Recurring Billing Fee: $0.10/transaction + $20/mo and $0.01/card for the Vault service Monthly Minimum: $75 (does not include monthly fee)

[tgiles → jread]

I think the more important questions to compare are the level of service, API development and status, available feature sets, and other such factors like whether you can easily transfer your account information elsewhere if you ever decide to change services. Everything I have read and heard, both in passing and first hand accounts, suggests to me that PayPal is not the route to go for handling payments and recurring billing for established startups. It is, however, a potentially viable option for those interested in simply setting something up quickly without much concern for long term growth and expansion of their own company.

[Roning → tgiles]

I agree. Too much time worrying about fractions of a point. Get your business running to the point that the 1/2 a percent makes a recognizable difference.

We use Paypal and Chargify and they work well together. It saved us the time and additional expenses of setting up multiple payment accounts.

One observation, AMEX really doesn't play well with Paypal. We've had $25K payments and the next nothing from a $17K day. Amex is spotty in what they'll accept from PP.

If you have heavy AMEX usage then go with something else. The fees are also high for PP acceptance of AMEX (3.5%).

[jeffepp]

Have you considered FreshBooks recurring billing? I ask because I am interested.

For the record, we are currently using Chargify -- had the same issue with Braintree (Chargify does not support v2) so switched to Auth.net

[jeffepp → jeffepp]

Now with the new pricing we are 'free agents' looking for a recurring billing platform. I really wish I had more information re: FreshBooks...

[tgiles → jeffepp]

I have no experience with and have heard nothing regarding using FreshBooks for recurring billing. It is my understanding, however, the FreshBooks primary focus is handling invoicing (physical and digital). This would lead me to believe that additional feature sets, such as recurring billing, would be, by default, prioritized lower for the company and therefore have a lower level of future support/expansion. Mind you this is all guess-work, but unless you're already using FreshBooks and/or interested in their invoicing solutions, they don't provide much of a draw from Braintree for recurring billing purposes in my mind.