Now let's look at the second category: payment processors. We’ll examine how they measure up when it comes to supporting international SaaS payment needs.
The aim for payment gateways, just like Stripe, is to let businesses be able to take payments online. Inevitably, this means businesses hit the same issues and challenges that you would with Stripe.Going global requires solid growth support, including international bank integrations, and support for local currencies and languages.
Self-serve SaaS sales means it's essential to deal with complex subscriptions in different currencies, along with tricky sales tax compliance challenges and the constant risk of fraud.
But typical payment processors have several limitations in these areas. For example, difficulties with international payment routing, dunning, or SaaS logic can create difficulties in your payments’ performance.
What's more, payment processors leave you fully liable for registering, filing, and remitting sales taxes globally – with hefty penalties for mistakes.
In short, you can’t build a complete SaaS payments process with just a payment processor. You'll need to invest in other tools to make sure all aspects of collecting payments and remaining compliant are covered.
Let's now examine the capabilities of five major competitors in the payment processors category.
As one of the original payment processors, PayPal is the preferred payment method in many European markets, such as the UK and Germany. It offers a wide range of languages and currencies.
PayPal is one of the more expensive tools on the market. It charges 2.9% plus currency fees for receiving payments, on top of additional fees if you want to accept or send money outside your set country or region.
What's more, you'll probably have to use PayPal alongside other payment gateways to provide a sufficiently wide range of payment choices to your international customers. Stripe and PayPal do not integrate which means more hassle with manual set up and a lack of a single source of truth.
Stripe is considered a payment gateway - a tool that will enable internet businesses of all sizes and product types to take and manage payments online. Just like PayPal, Stripe also offers a wide range of languages and currencies.
It includes functionality for integrating payments, approving or declining transactions and connecting your acquiring bank to your customers’ issuing banks, without needing a separate merchant account.
Stripe is easy to integrate with other tools thanks to its developer friendly APIs, except for PayPal with which it lacks an integration altogether. With the necessity of using PayPal, that means you'd have the two tools siloed and would need to manage them separately.
But Stripe’s high fees on cross-border transactions make it difficult for SaaS companies handling international payments. What's more, Stripe does not handle sales tax compliance, so you'll still be liable for all of that.
As an enterprise focused payments company, Adyen comes with powerful payment features, multiple languages and currencies. Its fees are adjustable according to your payment volume.
Importantly, Adyen is its own acquiring bank, with established bank entities in many countries. Adyen is a great fit for large businesses with dedicated engineering teams, necessary to manage its sophisticated revenue infrastructure.
One advantage of Adyen is its extensive documentation and flexible APIs, although this doesn't replace the need for significant time from your engineering team to get the platform up and running.
On the downside, Adyen is still a single payment gateway, just like Stripe or Braintree. That means it can't help you achieve optimal payment performance by rerouting failing payments between multiple providers. It will also leave the sales tax burden to you to take on.
One of PayPal's recent acquisitions, Braintree is a payment gateway for taking online payments. Its native integration with PayPal makes it a good choice for B2C and lower priced B2B sales in markets such as Europe, where customers typically prefer PayPal.
Just like Adyen and others, Braintree is a single gateway that can't reroute failing payments between multiple providers – dragging down your overall payment performance.
Braintree requires you to set up banks yourself when supporting new currencies. This leads to a responsiveness gap, which can hamper your rapid entry into new global markets.
SaaS founders moving from Braintree report higher payment failures outside their home markets. This happens because of the way Braintree connects to banks in different regions, such as routing European Braintree users through an acquiring bank in Ireland, even for transactions outside of Europe.
What's more, just like other payment gateways, Braintree still leaves you to take on subscription billing, analytics, localization, and sales tax compliance.
This fast-growing payment service is mainly used by midmarket and enterprise companies.
Although it’s still only a single provider, Checkout.com’s recent acquisition of ProcessOut means it can now offer payment routing – a clear advantage.
Checkout.com also provides an extensive range of payment methods and currencies, along with transparent pricing.
Despite these benefits, Checkout.com is still only a payment service. It doesn't handle any other aspects of the revenue delivery pipeline, such as sales tax compliance, data, or flexible subscriptions. What's more, Checkout.com’s manual approach can be time and resource heavy.