General

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1. Is billing that hard for engineers?

Yes. Billing is indeed much harder for engineers than it might initially seem. Imagine you’re starting a business, and you want to charge your customers for your products or services. At first, it seems pretty straightforward – you decide on a price, and customers pay you. But as your business grows, things get trickier. It’s like managing a puzzle where the pieces keep changing. You have to deal with dates, handle plan upgrades, track usage, avoid charging twice, remind customers to pay, and navigate the tax maze (see more here).

For example, deciding how often to charge your customers for subscriptions and charges might sound simple, like choosing between weekly, monthly, or yearly billing. But it’s more complex than it appears. You also need to factor in things like leap years, offering free trial periods, and deciding how to handle pro-rata pricing. And if you ever decide to switch from billing based on ‘anniversary’ dates to calendar dates, that adds even more complexity to the mix.

At Lago, we’ve adopted a radical approach – we’re building an open source billing API for product-led SaaS. Our API and architecture are open, so that you can embed, fork and customize them as much as your pricing and internal processes require.

If you’re interested, you can get started here or book a demo.

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2. How is Lago different from Stripe? Can Lago replace it?

Lago is an open source metering and billing solution, whereas Stripe primarily focuses on payment processing.

Stripe offers 21 products with separate fees (see more here), including Stripe Billing and Stripe Invoicing. Lago can replace Stripe for some services such as billing, invoicing and potentially more, but it does not process payments directly. Businesses using Lago will need a separate payment processor. Lago calculates how much you should charge a user and when, and sends this information to your chosen payment gateway(s) (Lago is agnostic) for the actual payment processing.

See detailed comparison of Stripe Billing vs. Lago here.

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3. Is Lago cheaper than Stripe?

Stripe Billing will cost you 0.5% (and up to 0.8%) of your transaction volume, on top of Stripe Payments (starts at 2.9% + $0.30 per successful card charge). With the full vendor lock-in of Stripe, you might stack dozens of fees that are directly impacting your own revenue. Once again, Stripe has 21 products and each of them has their own pricing (see more here). Lago offers a forever-free open source solution for small businesses, allowing access to fundamental billing features. Besides, Lago provides Enterprise plans with access to premium features listed here.

See detailed comparison of Stripe Billing vs. Lago here.

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4. How is Lago different from Chargebee?

Chargebee is not designed for usage-based billing. Lago is.

Lago is designed for usage-based pricing models, providing a high level of flexibility and support complex usage-based scenarios. Chargebee supports standard usage-based models (e.g. $20 per user) but may not be flexible enough for businesses that need support for complex usage-based pricing models (e.g., PayPal’s per-transaction pricing). Chargebee limits the maximum number of usages that can be recorded for a subscription is 5,000, over its lifetime.

Lago has no rate limit for usage-based billing events, allowing for high volume processing. Chargebee has a rate limit of 100 simultaneous requests per minute, which could prevent you from sending granular usage when you start scaling your number of customers. Additionally, Lago, being an open source solution, offers complete transparency, allowing engineers to audit its code and even build on top of it, which Chargebee does not allow.

See detailed comparison of Chargebee vs. Lago here.

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5. Is Lago cheaper than Chargebee?

Chargebee offers two services including billing and retention with separate fees. For billing:

• Starter plan: No flat fee, with the first $250K of cumulative billing included; 0.75% on billing thereafter. This plan includes basic billing features.
• Performance plan: $599 monthly flat fee for up to $100K of monthly billing; 0.75% on billing thereafter. This plan offers access to some advanced features.
• Enterprise plan: Custom pricing.

Lago offers a forever-free open source solution for small businesses, allowing access to fundamental billing features. Besides, Lago provides Enterprise Plans with access to premium features, as listed here.

See detailed comparison of Chargebee vs. Lago here.

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6. Can Lago be used by non-tech users?

Yes. Lago is a developer-first product with an intuitive interface. All actions in Lago can be performed via the API or the user interface, making Lago accessible to both tech-savvy and non-technical users alike.

For Engineers: Lago is Developer-first and API-first, offering high flexibility and ability to build on top of it. Lago can handle a high volume of events and works seamlessly with your existing tools.

For Product managers: Lago can adapt to any pricing model, and our easy-to-use interface lets non-technical teams manage billing without developer assistance. You can retrieve billing data for integration to your BI tools. You can also use it to trigger automations and implement alerting as needed.

For Finance leaders: Lago streamlines invoicing by automating charge calculations, supports various pricing plans, and helps track payments. Lago ensures the invoicing and cash collection process under your control. For instance, check who paid their invoices in a glance to improve cash collection. It also integrates billing data into your tools for better revenue insights.