It is in the interests of all business owners to focus on core competencies, rather than wasting precious time and effort on tasks and actions such as setting up payment gateways, licensing systems, trial kits, analytics, etc. Since Saas companies have their own specifics, they need a special approach to their payment infrastructure.
What is Paddle?
Paddle is a platform of checkout, ecommerce, marketing and analytics for software developers. This is a system that was made exclusively for SaaS business. It enables developers to sell software and manage time-consuming operations.
Paddle is a Merchant of Record. MoR means that the platform sells the product on your behalf, and receives payment for it. At the end of all payment routing, the Paddle pays the money to you.
Paddle core functionality
- Dashboard
Dashboard lets business to create and edit product data, generate licenses, manage customers and produce reports. Working with Paddle on a day-to-day basis indeed requires constant interaction with its dashboard and associated menu system. So, thanks to this tool, many options are available to you, and you can manage core aspects of the service from within one interface. For instance, track your revenues and order sources, process refunds, manage coupons and much more.
- Commerce
Checkout
Paddle provides tools that allow you to embed and customize the checkout page within the framework of the platform constructor. Such a flexible system allows you to accept different types of payments that are billing cycle set-based or usage-based. In addition, thanks to its tools, Paddle solves the problem of global reach for companies. So, through Localized Checkout, a business can change the language and payment method depending on the country.
Subscriptions
Paddle allows a business to charge customers on a one-time basis and in the form of a subscription. You can also set up recurring billing via the Paddle’s dashboard. Subscription management supports invoicing in more than 100 languages and in 130 currencies.
- Finance
Payments
Integration with Paddle allows businesses to accept different types of payments, as Paddle routes between multiple payment partners. The Cross Border Payments option supports a variety of payment methods, both international, for example, Paypal, IDEAL, AliPay, and local for each country.
Tax & compliance
Global Tax Compliance is a solution, which is a great advantage of the platform. Sales taxes and VAT are automatically calculated, collected, and submitted separately for each client. This function works by default in every country where you do business. This is a guarantee for the business that invoices, payments, receipts, and subscriptions comply with tax laws and regulations.
Fraud protection
Fraud Management uses smart risk tools, with which supports four layers of fraud protection. So, Paddle protects its customers from credit card fraud, fights with chargebacks, and screen fraudsters. Any suspicious transactions are automatically flagged.
- Data
Reporting
Paddle allows businesses to receive reports on each payment in real time. In brief, all payment processes are shown in Paddle’s dashboards. Thus, this option provides all the data about acquisition, recurring revenue, retention, and much more all in one tool.
Upsell insights
This option is designed to group customers from the same business domain. Further, this feature, based on purchases made through checkout, identifies customers ready for expansion. Subsequently, the data obtained provide a basis for upselling these customers into a more profitable business account.
- Support
The main work of the support service is aimed at analyzing the operation of systems, anticipating potential difficulties for business and posting all the necessary information on the Paddle support pages. If you don’t find a solution on the site, you can reach Paddle support via their helpdesk.
Paddle products and features
Paddle includes many different built-in functions for selling desktop software or SaaS subscriptions. To configure some of them, you may need to use the API.
- Analytics
Using the analytics tool gives the business the ability to track various useful parameters. For example, app usage time, trial usage statistics, trial to paid conversion period, version-wise use counts etc. Further, a business can use this data to improve its work and its product, which will lead to an increase in conversion.
- Trials
Paddle SDK allows you to provide prospects a free trials of your apps. To continue using and remove the limitations of the trial version, you need to make a purchase or activation.
- Licensing
This is a tool directly related to the trial version. This mechanism protects the trial version of your product. Obtaining a license key is one of the ways to remove restrictions.
- Digital Files Secure
Paddle offers its users to host files themselves or use the Paddle hosting option. This tool guarantees the security of your data, while file access control is fairly basic for businesses.
- Paddle Discovery
In essence, it’s an internal recommendation network that uses algorithms to find potential customers of your product. Then, the network recommends your app to selected users via email and Paddle Locker. This tool can help expand access to your applications and increase sales.
Pricing and fees
There is no subscription fee for using Paddle. In terms of pricing there’s a percentage fee on transactions only. The basic package is a flat 5% of the transaction amount + 50 cents per transaction.
Large companies with a turnover of $ 30,000 or more per month can negotiate a discount. Most services, such as subscription, invoicing, reports, tax accounting and other functions are not subject to additional fees. However, in addition, Paddle offers a number of paid business add-ons, for example, affiliate feature.
Is Paddle Right for Your Business?
If you are a web developer, software seller, or a SaaS company, Paddle can be a great option for payment acceptance.
So, the absence of a monthly fee and fee only upon of payment acceptance are an advantage for those who are just starting out. It is also important that the transition to Paddle from another payment platform is quite easy, as is the implementation process.
One of the most important benefits and differences of Paddle from competitors is the absence of restrictions in providing access for different countries of the world. Paddle is available in many countries where other payment platforms do not connect users. At the same time, all laws on payments for each country are necessarily observed. However, there are limitations. So, for example, you will not be able to manage multiple projects from one account.
Paddle can also be used in conjunction with popular platforms including Salesforce, NetSuite and Xero.
With all the numerous advantages listed above, users of the Paddle platform also note a number of disadvantages.
The fee for each transaction can become a big disadvantage if your business is steadily growing and developing, which means this amount will gradually increase.
And the Paddle fees are calculated on the final price (including VAT), not on the net price.
The biggest complaints are caused by seller and customer support. Solving problems that are not covered on support pages often takes a very long time. For a business, this can lead to the loss of customers.
The onboarding process also takes way to long, compared to competitors.
Paddle solves business problems related to refunds and payments, which can have both pros and cons. Such a system does not allow businesses to see how many users had a problem with a product before canceling a subscription or issuing a refund – so no possibilities for retention and returning customers.
We can help
Choosing a billing platform is a responsible decision that can help your business grow and scale. Before integrating with any system, you need to analyze how this or that platform really suits your business. Starting from whether the platform is suitable for your field of activity and geography of sales and ending with each individual feature.
It is worth considering all options. Including startups with a more personal approach to each client and each client’s needs than in large corporations.
Rainex is a billing and subscription management platform that will allow you to manage payments and subscriptions in one tool. We offer you flexible configuration of tariff plans with any frequency and in any currencies, integration with several payment gateways at the same time, full control of your customers and their subscriptions, multilingual notifications and invoices, and much more.
To learn more, sign up for a product demonstration. We will be happy to tell you about us and answer any questions.
