Subscription Billing Costs: Stripe Billing vs. Recurly vs. Chargebee
A subscription billing software comparison that separates platform fees from processing costs so you can model Stripe Billing, Recurly and Chargebee.
Photo: Pixabay
On this page 8 sections
- Subscription Billing Software Comparison: Platform Fees vs. Processing Fees
- How Stripe Billing Fees Work
- Recurly Pricing and Chargebee Pricing Tiers
- Recurring Billing Platform Cost at $20K, $100K and $500K MRR
- Revenue Recovery Features That Pay for Themselves
- Gateway Flexibility and Avoiding Processor Lock-In
- Choosing the Best Subscription Billing Software for Your Model
- Next Steps: Build Your Own Cost Model
Key takeaways
- Billing platform fees and card processing fees are separate costs. Model each one before you compare vendors.
- At lower volume, a bundled setup can cost about the same as an unbundled stack. At higher volume, negotiated processing usually matters more than the billing fee.
- Strong dunning, smart retries and card updating can recover enough revenue to outweigh a higher platform fee.
- Gateway-agnostic billing platforms let you change processors without rebuilding your subscription logic. Confirm card data portability before you sign.
A subscription billing software comparison often goes wrong in a predictable way. Owners line up headline prices for Stripe Billing, Recurly and Chargebee and pick the lowest number. That comparison is incomplete. Each platform's fee sits on top of your card processing cost, and some platforms bundle the two while others keep them separate. This guide explains how each pricing model works and walks through an illustrative cost model at three revenue levels. It also covers which features can justify a higher fee and how to avoid locking yourself into one processor.
Vendor pricing changes often, and much of it is negotiated at higher tiers. Use the structure here to build your own comparison, and confirm current terms directly with each vendor.
Subscription Billing Software Comparison: Platform Fees vs. Processing Fees
Your recurring billing costs have two layers. Comparing vendors fairly requires separating them.
Billing platform fees pay for the subscription engine. That includes plan and pricing logic, proration, invoicing, trials, coupons, dunning, revenue reporting and the customer portal. These fees are usually a percentage of billed revenue, a monthly subscription, or a mix of both.
Payment processing fees pay for moving money. They include interchange set by the card networks, network assessments, your processor's markup and any gateway fees. You pay these no matter which billing software you use.
| Cost Layer | What It Covers | Typical Structure | Negotiable? |
|---|---|---|---|
| Billing platform | Subscription logic, invoicing, dunning, analytics | Percentage of billed revenue, monthly tier, or both | Often, at higher tiers |
| Processor markup | Acquiring, settlement, support | Flat bundled rate or interchange-plus markup | Yes, especially at volume |
| Interchange and assessments | Card network and issuer costs | Varies by card type and transaction type | No |
| Gateway | Transmitting card data to the processor | Monthly fee and/or per-transaction fee | Sometimes |
| Extras | Tax calculation, fraud tools, chargebacks, add-on modules | Per use or per module | Varies |
One detail catches many owners: check what the platform fee is calculated on. Some platforms charge on billed or processed revenue, which can differ from monthly recurring revenue (MRR). Annual prepaid plans, one-time setup charges, usage overages and collected sales tax can all raise the base the platform charges against.
How Stripe Billing Fees Work
Stripe Billing is an add-on to Stripe's payment processing. Its fees are generally a percentage of the volume you bill through it. Stripe also publishes alternative plan structures, so review the current pricing page and any contract terms for your account.
Three structural points matter more than the headline rate:
- The billing fee stacks on processing. You pay Stripe's processing fees on each transaction plus the Billing fee. When you compare against another platform, add both together.
- Add-ons are priced separately. Features such as tax calculation, advanced fraud screening or invoicing may each carry their own charges. List the ones you would actually use.
- Processing and billing come from one vendor. That simplifies setup, but your subscription engine and your merchant relationship are tied together. If your processing account is reviewed, restricted or closed, billing is affected too. Our guide on why Stripe closes merchant accounts explains how that happens.
Stripe's bundled processing works well for many subscription businesses, especially early on. As volume grows, compare its effective rate with what a negotiated merchant account would cost.
Recurly Pricing and Chargebee Pricing Tiers
Recurly and Chargebee are standalone subscription management platforms. Both publish plan tiers that scale with revenue and features, and both offer quote-based pricing at the top end. Neither is primarily a payment processor. They are built to connect to one or more payment gateways that you choose.
When reviewing Recurly pricing or Chargebee pricing, check:
- Revenue caps on lower tiers. Entry plans may limit how much revenue you can bill before you must upgrade.
- Overage terms. Find out what happens to your rate when you exceed a tier mid-contract.
- Feature gating. Advanced dunning, revenue recognition, multiple gateways, multi-currency and API limits may be reserved for higher tiers.
- Contract length. Annual commitments can lower the rate but reduce flexibility.
- Implementation and support fees. Migration help and premium support may be priced separately.
Because these platforms don't bundle processing, the processing line in your model depends on the merchant account and gateway you connect. That is where the cost difference between platforms often shows up.
Recurring Billing Platform Cost at $20K, $100K and $500K MRR
The model below uses hypothetical rates chosen only to show how the math works. They are not the published or negotiated rates of Stripe, Recurly, Chargebee or any other vendor. Substitute real quotes when you run your own numbers.
Illustrative assumptions:
- Average charge of $50, so $20K MRR means 400 transactions, $100K means 2,000 and $500K means 10,000.
- All revenue is billed monthly, so billed volume equals MRR.
- Platform Structure A (pure revenue share): 0.75% of billed revenue, no monthly fee.
- Platform Structure B (tier plus overage): $300 per month covering the first $50K billed, plus 0.6% above that.
- Processing Option 1 (bundled flat rate): 3.0% + $0.25 per transaction.
- Processing Option 2 (interchange-plus with a separate gateway): an assumed blended interchange and assessment cost of 2.1%, plus a 0.30% + $0.10 markup, plus a gateway at $25 per month and $0.05 per transaction. Real interchange depends on your card mix and how transactions are submitted.
Platform Fees Only (Illustrative)
| MRR | Structure A | Structure B |
|---|---|---|
| $20,000 | $150 | $300 |
| $100,000 | $750 | $600 |
| $500,000 | $3,750 | $3,000 |
Processing Fees Only (Illustrative)
| MRR | Option 1: Bundled | Option 2: Interchange-Plus |
|---|---|---|
| $20,000 | $700 | $565 |
| $100,000 | $3,500 | $2,725 |
| $500,000 | $17,500 | $13,525 |
All-In Monthly Cost (Illustrative)
| MRR | Stack 1: Structure A + Bundled | Effective Rate | Stack 2: Structure B + Interchange-Plus | Effective Rate |
|---|---|---|---|---|
| $20,000 | $850 | 4.25% | $865 | 4.33% |
| $100,000 | $4,250 | 4.25% | $3,325 | 3.33% |
| $500,000 | $21,250 | 4.25% | $16,525 | 3.31% |
The pattern in this example is what to look for in your real numbers:
- At low volume, the stacks cost about the same. A fixed monthly platform fee hurts when revenue is small, which can make a pure revenue share competitive.
- At higher volume, processing dominates. Even at $500K MRR, platform fees are a small share of the total. A modest difference in processing rate outweighs a difference in billing fees.
- Percentage-only structures never scale down. Your effective rate stays flat as you grow unless you negotiate.
Revenue Recovery Features That Pay for Themselves
The cheapest platform isn't always the least expensive to run. Failed renewals quietly cut into subscription revenue, and recovery tools vary widely between platforms and plan tiers.
Features to compare:
- Smart retries. These reattempt declined payments at better times instead of on a fixed schedule. Retries must also respect card network limits. See our guide on Visa and Mastercard retry limits and reattempt fees.
- Automatic card updating. Updated card details flow in before a renewal fails. Our explainer on how card account updater keeps subscribers billing covers how it works and where it's available.
- Pre-dunning and dunning emails. These include expiring-card reminders and branded payment-failure messages with a secure update link.
- Decline code handling. Hard declines are treated differently from soft declines so you don't waste retries.
- Recovery reporting. You should be able to see how much revenue the tool actually saved.
Here's an illustrative way to weigh these features. Suppose that at $100K MRR, $5,000 of renewals fail in a month. If a platform's recovery tools win back an extra 20% of that compared with a cheaper option, that's $1,000 a month. In that case, a platform fee that's a few hundred dollars higher still comes out ahead. Ask each vendor how they measure recovery, then test the claim against your own decline data.
Recovery and dispute prevention go together. Clear billing descriptors, renewal reminders and easy cancellation reduce disputes. For more, read our guide to winning cancelled recurring chargebacks and our subscription payment processing guide to reducing failed payments.
Gateway Flexibility and Avoiding Processor Lock-In
Lock-in is a hidden cost in any subscription billing software comparison. It matters most for businesses that processors may view as elevated risk because of chargeback exposure, free trials or negative-option offers.
Why gateway flexibility matters:
- Negotiating leverage. If your billing engine can connect to a different gateway, you can shop processing separately from billing.
- Continuity. A backup gateway or second merchant account can keep renewals running if one account is paused.
- Pricing model choice. You can move from bundled pricing to interchange-plus as volume grows.
Questions to ask before you sign:
- Which gateways does the platform support, and on which plan tier?
- Can you route different products, currencies or regions to different gateways?
- Who stores the card tokens, the billing platform or the gateway?
- What is the process for exporting stored card data to another PCI DSS-compliant provider, and how long does it take?
A common setup pairs a gateway-agnostic billing platform with your own merchant account and a gateway such as Authorize.net or NMI. Confirm that your chosen gateway appears on the billing platform's supported list. MannyPay provides merchant accounts and payment gateway options for subscription businesses. That includes high-risk merchant accounts for models that mainstream bundled processors may decline. Approval depends on underwriting.
If your subscription model sits in the middle of the risk spectrum, our article on why some businesses land in the medium-risk tier explains how underwriters see recurring billing.
Choosing the Best Subscription Billing Software for Your Model
There is no single best subscription billing software. The right choice depends on your model, volume and risk profile.
| Your Situation | What to Prioritize |
|---|---|
| Early stage, simple plans, low volume | Fast setup, low fixed fees, bundled processing |
| Growing, mixed plans, add-ons and usage billing | Flexible pricing logic, proration, strong dunning |
| Higher volume | Negotiable platform fee, separate interchange-plus processing |
| Elevated chargeback or trial risk | Gateway flexibility, backup processing, dispute tools |
| Selling internationally | Multi-currency support, local payment methods, gateway routing by region |
Before you decide, also confirm that the platform supports your compliance obligations. That includes renewal reminders, cancellation flows and consent records. Requirements vary by state. Our automatic renewal laws compliance map is a starting point, and you should confirm specifics with a qualified attorney.
Next Steps: Build Your Own Cost Model
- Pull three months of billed revenue, transaction counts, refunds and decline data.
- Get written quotes from each billing platform, including add-ons you'll actually use.
- Get processing quotes separately, including at least one interchange-plus option.
- Plug both into the stacked model above at your current volume and at the volume you expect in 12 to 24 months.
- Ask each vendor about card data portability and gateway support.
If you want the processing side of that model priced out, request a free processing quote from MannyPay. A MannyPay specialist will respond within one business day. Have your recent processing statements ready so the comparison reflects your actual volume and card mix.
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
