In today's fast-evolving SaaS landscape, usage-based billing has emerged as a crucial aspect for businesses looking to align their revenue with the value they provide to customers. As more companies adopt this pricing model, the need for robust and efficient usage-based billing software solutions has become increasingly apparent. In this comprehensive comparison, we will explore some of the most popular usage-based billing software solutions available in the market, including Stripe Billing, Chargebee, Recurly, and Zuora, and introduce Ultrance, a comprehensive solution that combines usage-based billing with API gateway features and a self-service customer portal.
Popular Usage Based Billing Software Solutions
Stripe Billing
Stripe Billing is a well-known platform that offers a range of features for managing subscriptions and recurring payments. It provides a simple and intuitive API for developers to integrate billing functionality into their applications. Stripe Billing supports various pricing models, including usage-based billing, and offers a customizable checkout experience for customers.
Stripe billing does support the ingestion of events via API, as documented in their API reference. Their ingestion API allows up to 1000 requests per second, which should be sufficient for most use cases. Stripe also has recently released the option to bulk upload usage records via AWS S3, which can be useful for businesses with large volumes of usage data.
One of the key benefits of Stripe Billing is its seamless integration with the Stripe payment gateway, allowing businesses to handle both billing and payment processing within a single platform. Additionally, Stripe Billing provides detailed analytics and reporting, enabling businesses to gain insights into their revenue streams and customer behavior.
However, Stripe Billing may not be the most suitable choice for businesses with complex billing scenarios. Lago did a great job explaining some of the limitations of Stripe billing in their own article.
Chargebee
Chargebee is another popular usage based billing software solution that focuses on subscription management and recurring billing. It offers a comprehensive set of features, including support for various pricing models, dunning management, and revenue recognition.
Chargebee is not a fully managed usage based billing solution as it does not support the ingestion of usage data via API. Instead, Chargebee requires you to keep track of your user's usage data and report it to Chargebee via their API. This can be a drawback for businesses that do not have the infrastructure to track usage data.
Lago
Lago is an up and coming usage based billing software startup that offers an open-source billing platform used by companies such as Mistral.ai and Groq. Lago provides a beautiful and easy-to-use interface for managing subscriptions and usage-based billing. Lago integrates with many of the major payment gateways so that you are not locked into any single provider.
Lago supports event ingestion at a high scale, although their specific limits are not publicly documented. Reading through their slack channel, it seems like they are building a solution to handle many thousands of events per second.
Since Lago is open-source, you can host it on your own infrastructure, which can be a benefit for companies that require more control over their billing system. However, some of their features are blocked behind a premium license, which can lead to some confusion. If you plan to self-host Lago, make sure to follow the APGL license and understand the limitations of the free version.
Metronome
Metronome is a billing platform primarily built to support usage based billing. Metronome offers a complete billing solution that includes powerful analytics, real-time usage dashboard for customers, flexible pricing models, without the need for you to run any infrastructure yourself.
Metronome is extremely scalable, as one of their biggest customers is Openai, which has a extremely high volume of usage data. You can be confident that Metronome can handle your usage data if it can handle Openai's.
Orb
Simarily to Metronome, Orb is another usage based billing platform startup. Orb offers many of the same features as Metronome, including a real-time usage dashboard, flexible pricing models, and powerful analytics. Orb is known to be a great choice for companies, and many are very happy with their service, as you can see from their reviews.
Ultrance: A Complete Solution An API Business
Ultrance is another usage based billing solution, but it is much different than the other solutions mentioned. Ultrance is an API gateway that includes usage based billing as a core feature. This means that you can use Ultrance to manage your APIs, track usage, and bill customers all in one place. This means that all you need is to run your API, and Ultrance will take care of the rest of the work for you. This includes tracking usage, billing customers, and providing a self-service portal for your customers to manage their accounts. For API first companies, Ultrance is a great choice as it allows you to focus on building your API.
Conclusion
In the past several years, the usage-based billing model has gained significant traction among SaaS businesses looking to align their revenue with the value they provide to customers. More specifically, this type of billing model has become increasingly popular among AI, infrastructure, fintech and developer tool companies. As a result, there have been many new usage-based billing software solutions that have emerged to help businesses implement this complex pricing model. There are lots of good choices, and the best one for you will depend on your specific needs and goals. However, if you are an API first company, Ultrance is a great choice as it combines usage based billing with API gateway features and a self-service customer portal.