Ask HN: Should I switch from Chargebee to Paddle for my SaaS?

> I know that Paddle, as a merchant of record, handles tax and several other things, and I like the idea of receiving just one reverse invoice per month which would make accounting easier too.

For what it's worth, I've been using Paddle for a few years for a paid Chrome extension (https://www.checkbot.io/) and it's been that simple for me. I put through the Paddle payments as my income on tax returns and I'm done for admin.

Chargebee does seem to have a lot more customer/subscription management features though so I would check Paddle has everything you need there.

Fastspring and Gumroad are worth looking at too as they handle VAT as well.

We switched to paddle after a week of stripe and realizing we'd have to do taxes ourself. When I asked stripe how we can handle taxes they just told me to use another Saas to do the tax calculating for me.

Sure paddle takes away like %10-20 from each payment for their service but it really saves stressing over taxes and other things.

> When I asked stripe how we can handle taxes they just told me to use another Saas to do the tax calculating for me.

Do you know if most people actually do this? I feel like they don't because I hear about Stripe a lot but never how people handle tax.

> Sure paddle takes away like %10-20 from each payment for their service but it really saves stressing over taxes and other things.

Just to clarify for others, but it used to be 5% + $0.50 for Paddle fees and Paddle take out the country specific tax (which they don't have a choice in) before sending anything to you, leaving you the rest.

So payments from e.g. the US to the UK you won't lose anything extra to tax but from EU countries to the UK the VAT ranges from about 15% to 25% depending on the country (and these tax rules are always changing, but Paddle deal with this for you).

Not sure if most people do it. I feel like they don't just due to the complexity?

It's tax though. They'll get in trouble eventually surely? Having to clean up a tax mess after it's been going on for years (over multiple countries too) is one of my worst nightmares but I feel most people aren't this cautious haha.

I'm guessing enough people slip through the cracks :/

It may be that most users of Stripe:

1. Use another Saas like Quaderno, Taxjar, Octobat or Avalara.

2. Are mostly US based businesses and don't care for EU based taxes.

3. Haven't yet reach the threshold for charging VAT and Stripe on its own.

Yeah, taxes is the main hassle I definitely want to avoid.

Thanks, sounds like your experience so far has been positive, right?

Yep, let me know if you've got any questions.

The only bad things I can think of is their API documentation wasn't that clear sometimes (their email support always helped though, and maybe the docs have improved now), their API was missing a few things I expected (like being able to query subscriptions by email address, but maybe that's changed), and they don't have a ton of features compared to say Fastspring (e.g. there's no self-service area where users can view and manage their subscription, but you can get the API to generate a link you can send to a user that lets them cancel their subscription and another link that lets them update their payment details).

Awesome. How do you manage testing considering that they don't have a test environment? Do you test with the same account as production or with a different account created just for testing? Also how quickly do they usually respond when you contact them? Thanks!

I just created a separate Paddle account with a different email address for testing. Inside that account, I manually created test versions of each product. In my testing branch, I use the testing product IDs for the checkout.

You can also give yourself discount codes that give 100% off to test directly with the production Paddle account, or just refund yourself if you want to test some real payments.

Would be nice if they had more testing features build in though.

> Also how quickly do they usually respond when you contact them?

Usually after one working day (not on weekends).

Do they allow creating accounts just for testing? Would I risk that they close them?

One thing that annoys me about the lack of a test environment is also that they allow only one webhook URL per account. I have three environments for my SaaS, dev/staging/prod. So with Chargebee I have the "live site" (as they call it) linked to the prod environment with its own webhook URL. Then I have the "test site" shared between dev and staging. But with Chargebee I can add multiple webhook URLs, so all events get sent to both dev and staging and each environment only cares about its own events.

With Paddle, unless I create three accounts for the different environments, I would have to somehow share a webhook URL between at least dev and staging if I create one account for dev/staging and another for production. I guess I could create a simple app that proxies requests to the environments by looking at some string that tells which environment the event is for (I know that Paddle allows you to add a passthrough setting with some custom data - do you know if this persists across all future events for a subscription?)

> Do they allow creating accounts just for testing? Would I risk that they close them?

Best to just ask them. They've never had an issue with my ones even after they've asked why they're not active.

> One thing that annoys me about the lack of a test environment is also that they allow only one webhook URL per account.

Yep, it's not ideal and I haven't heard anything about them changing that. Is having to create three accounts and a few product clones in each that big a deal though? It's not the kind of configuration you change often and once I had subscription create/update/cancel event processing code set up I've barely had to touch it.

> do you know if this persists across all future events for a subscription?

I don't know to be honest. This is the kind of thing I meant where the API might not be clear but support will tell you. I had to figure out a few things just by experimenting too. The API has at least been reliable.

I would be OK with creating multiple accounts if it's allowed. It's not a big deal and I would very much prefer not polluting the main account with test data. From reading the docs it seems that the passthrough data provided at checkout is returned with each webhook.

The only problem with services like Paddle is that your customers are not your own anymore technically. The customer will belong now to Paddle and if something happens with Paddle or your account, you'll lose all of them.

PS: We're using Paddle for a few years and we're a bit concerned by this.

I have users in my database anyway, so in the worst case scenario I can just revert to Chargebee (I will leave the current integration as is just in case, and disable it in favor of Paddle) and ask users to subscribe again without recreating the whole account and without losing any of their data. It's unfortunate to ask users to resubscribe though...

asking users to re-subscribe will lose from 20% to 40% of your customers (my estimation). Unless your SaaS is business critical, a good percentage of customers pay without using or really needing the app so much to re-subscribe.

What is your estimation based on? My users sign up with my app and at the moment a free subscription is created for them automatically on sign up, and they can upgrade to a paid plan from within the app. So I would only ask them to pick a plan again once I switch, not to recreate the whole account. Their account plus data etc would stay the same. Do you think it would still be bad to ask them to pick up a plan again, knowing that the previous subscriptions would be cancelled automatically when they resubscribe? Thanks

You at least get the email address of your customers (unlike say when Google deprecated payments recently with the Chrome Web Store, so it would have been much harder to retain existing customers).

How does this compare to something like Stripe? How would Stripe help you keep them if something happened to Stripe?

Stripe is a payment processor, you have a direct relationship with the customer, on the invoice is written your company details. With Paddle, on the invoice you'll see Paddle company details, all your customers pay Paddle, not your company. You won't have any legal or fiscal relationship with the customer.

> You won't have any legal or fiscal relationship with the customer.

What does that practically mean when running a SaaS though? If Paddle was going away, you for sure have access to your customer email addresses to ask them to resubscribe and Paddle might help you migrate the payment details to another payment provider. How is the situation any easier or better with Stripe?

The Paddle invoice at least has your product/company name + website link on it, along with Paddle's details. It doesn't feel any different to buying e.g. Android, iOS or Steam products to me - I don't see why customers would care who is legally receiving the payment as long as they get their product.

Sometimes customers are confused that they see a charge for PADDLE.NET instead of your company name.

I think it's the same thing with any provider. As long as you have users in your own database, you can just ask them to resubscribe when you switch provider. Not sure if some users would cancel because of this inconvenience.

Krish, founder of Chargebee here. I read your feedback in the comments about EU VAT and understand your preference to not handle this yourself. Thank you for the detailed note. I would love to explore how we can improve our offering to bring the best of both worlds even if it is not possible immediately. My email id is krish at Chargebee. Thanks.

Hi Krish! So to be clear I absolutely love Chargebee! It's rich of features, very flexible and support is always friendly and ready to help. It's probably the best experience I've had in a while with any SaaS.

The problem is that I don't want to handle VAT :( Are there any plans to do something so that Chargebee can act as a MoR as well? That would be super awesome!

Have you tried contacting Paddle about this? https://paddle.com/migrate

Just left a message in their chat, thanks. Also looking forward to see how quickly they respond.

How have you been managing VAT currently with Chargebee? Is this built in with them?

So Chargebee allows you to configure VAT rates and whether to include VAT in the prices or add it to the invoice amount. However that's just for the collection so you still need to file and pay the VAT yourself.

I am still in the beginning, so at the moment I just charge the Finnish VAT regardless of the country the customer is based in (I live in Finland) and pay that VAT to Finland only.

Once I reach 10K in yearly EU sales I am supposed to either register an office in each country where I do business to file and pay taxes there, which is crazy at a tiny scale like mine, or register for VAT "MOSS" which allows me to collect tax in the different rates depending on the countries, but still only pay the collected tax to Finland.

But what if they decline my MOSS registration for some reason? Then I am screwed I guess.

But generally speaking I hate to deal with tax and I would very much prefer Paddle handled all of that for me.

> Once I reach 10K in yearly EU sales I am supposed to either register an office in each country where I do business to file and pay taxes there, which is crazy at a tiny scale like mine, or register for VAT "MOSS" which allows me to collect tax in the different rates depending on the countries, but still only pay the collected tax to Finland.

Sounds accurate to me. This only covers the EU as well and not other countries (assuming you want to sell worldwide), and the rules are always changing too (I'm in the UK and Brexit just happened!).

Yeah I haven't even looked into other countries yet! So it's a mess for an indie hacker like me. I am a team of one and I don't really have the resources to keep myself compliant and up to date with this stuff...