Stripe Billing

Stripe Billing simplifies recurring payments and subscription management, but its 0.5-0.8% revenue fee (on top of Stripe's standard 2.9% + 30¢ processing fee) creates a significant tax on subscription revenue. For a SaaS company processing $100,000/month in subscriptions, Stripe Billing adds $500-800/month in platform fees alone.

Lago is an open source billing engine purpose-built for usage-based and subscription billing. It handles metering, pricing plans, invoicing, credit management, and integrates with multiple payment processors — not just Stripe. Kill Bill is a more mature, battle-tested billing platform that supports subscriptions, one-time charges, usage billing, invoicing, and payment retries with a plugin architecture for extending functionality.

The architectural advantage of open source billing is payment processor independence. Stripe Billing locks you into Stripe for payment processing. Lago and Kill Bill integrate with Stripe, but also work with Adyen, Braintree, GoCardless, and others — letting you optimize processing fees across providers or comply with regional payment requirements.

For companies with complex billing models — usage-based pricing, hybrid plans, enterprise contracts with custom terms — the flexibility of an open source billing engine justifies the setup investment. Lago's event-based metering system is particularly strong for API companies, cloud platforms, and any business that charges based on consumption rather than flat subscriptions.