Better Billing Alternatives to Stripe & Square for Small Businesses

TL;DR

• If you're seeking Square stripe alternatives for your small business, consider the limitations of these platforms, such as account stability issues, potentially high costs as you scale, and lack of customization.
• Explore alternatives like Togai for usage-based metering and billing with flexible pricing strategies, PayPal for its global reach and seller protection, Braintree for its dedicated merchant accounts, and QuickBooks for integrated accounting.
• Consider the specific needs of your business, such as handling complex billing requirements, integration capabilities, developer-friendliness, and the ability to handle global transactions, when selecting a payment processing alternative.
• Assess the ease of use and the training required for new users, as these factors significantly impact the transition from Square or Stripe to a new platform.

Why Stripe & Square May Not Be the Ideal Billing Platforms

When it comes to billing platforms, Stripe and Square often dominate the conversation, but is their popularity truly warranted? Beneath their sleek interfaces and robust marketing lies a set of limitations that could disrupt your business operations when you least expect it. From sudden account freezes to limited support, these issues aren't just minor inconveniences—they can be the difference between smooth sailing and a financial storm. Before you settle for the usual suspects, it's worth diving deeper to uncover why these platforms might not be the best fit for your unique needs.

Limitations of Stripe

Here are key considerations that prompt businesses to look beyond Stripe:

Stripe Billing & Pricing - What Can Possibly Go Wrong?

In a simple market survey, more than a dozen SaaS business owners were asked:

“How much do you pay for Stripe?” There was a mixed bag of answers ranging from 4% to 8% of their total review. But none of them had an accurate figure in mind.

Stripe is one of the most popular payment platforms, and their pricing (normally associated with card processing charges) is generally perceived as transparent - echoing their tagline, “Always know what you’ll pay.”

Doesn’t seem so from the market survey observations, right?

Let us see why.

Stripe excels in various aspects, yet its one-size-fits-all approach may not cater to the diverse needs of businesses. Pricing structures, global reach, customer service, industry-specific considerations, and alternative service offerings are factors that businesses should weigh when evaluating payment processors.

Let us illustrate this with an example:

Assume you are a B2B SaaS firm with a regular three-tier subscription offering. Below is a list of Stripe products you will have to bring to support your business model:

Of course, some of the other products you may need, say the Stripe quote or Stripe invoicing, may be included in the Stripe payments or Stripe billing solution.

So, think now. Are you ready to leave so much to Stripe?

Scaling up costs you more.

Stripe’s flat-rate pricing of “2.9% + 30 cents” might appear lucrative initially. But as you scale up and your transaction volume grows, Stripe fees can break the bank for you. In fact, you can find better deals with other providers.

Here’s a quick illustration of how your fees will work out if you scale from, say, 1,000 users to 50,000 users.

Also Read - Stripe Billing: Pros, Cons and Alternatives in 2023

Hidden costs can surprise you.

Stripe pricing is transparent. Or so we believed. Did you know that there are several processing fees that many are not even aware of?

• For international transactions, Stripe levies additional charges for currency conversion!
• During payment disputes, when a customer fails to recognize a transaction, Stripe dumps you with a chargeback fee.
• For refund transactions, Stripe won’t return your original fee. You just have to forego your processing fee on the original transaction.

Check out this specific conversation on the Hacker News thread. You will know what we mean.

Negotiating fees can get hard.

The more you use Stripe’s suite of products, the more difficult it will be to negotiate on the fees. And if you do try to negotiate your prices, remember, the process is pretty complex, and you also get locked into multi-year contractual commitments.

To sum up, Stripe is undoubtedly a great platform. However, the closed ecosystem business model is not agreeable to many businesses. In fact, more businesses are trying to decouple their relationship with Stripe and looking for agnostic billing solutions.

Limitations of Square

Here are some reasons to consider alternatives to Square:

Square, praised for its ease of setup, free hardware, and simplicity, has its drawbacks. Businesses seeking better pricing, robust support, and advanced features may find it worthwhile to explore alternatives that offer a more tailored solution.

How We Evaluated Square and Stripe Competitors & Alternatives

To evaluate the competitors and alternatives of Stripe and Square, we began by pinpointing the areas where the features of both Stripe and Square may have limitations. Subsequently, we gathered a list of potential provider options. Our assessment of each alternative focused on the following criteria:

Price

To find suitable alternatives, we analyzed the pricing models of various providers, aiming to pinpoint cost-saving opportunities and potential drawbacks. Our assessment covered transaction charges, subscription fees, hardware costs, and any hidden fees that could impact a business's bottom line.

In comparing the pricing models and fee structures of alternative providers, we considered factors such as flat fees per transaction or tiered pricing based on transaction volume. We also included factors such as overall cost, including monthly charges, setup fees, and any additional fees for specific features or services.

Capabilities and Features

In our quest to identify viable alternatives, we engaged in a thorough comparison of features, meticulously scrutinizing customization options, functionality, scalability, and integration capabilities for each option. Our focus was on finding alternatives that support a diverse range of payment methods, encompassing digital wallets, international payments, and credit cards. Additionally, we assessed whether the alternatives offer essential features such as recurring billing, subscription management, invoicing, usage billing, hybrid pricing and other functionalities aligned with specific business requirements.

Developer-Friendliness and Integration

In evaluating integration and developer-friendliness, we thoroughly examined the ease of integrating with existing platforms, applications, and systems. A crucial factor in this assessment was the presence of developer-friendly documentation and a robust API (Application Programming Interface), as these elements significantly contribute to a smoother integration process. Our scrutiny also extended to determining whether the alternative provides additional support, such as plugins, software development kits (SDKs), or pre-built integrations tailored for popular e-commerce platforms like WooCommerce, Magento, or Shopify.

Ease of Use

When gauging the ease of use for each alternative, we placed a strong emphasis on intuitive software and user-friendly interfaces, recognizing their significance for businesses transitioning from Square or Stripe. Our assessment took into account various factors, including the training required for users, the overall user experience, and the complexity of setup.

We strategically aligned each of our selected alternatives with distinct business types that have surpassed the capabilities of Square's and Stripe's payment processing, business management solutions, and POS. This tailored matching process aimed to ensure that each alternative addresses the specific needs and growth trajectories of businesses seeking a more user-friendly and advanced solution.

Customer Support

Our assessment considered the quality of customer support offered by each alternative, specifically looking for providers that offer responsive channels like email, phone, or live chat. Recognizing the importance of uninterrupted payment processing, we also scrutinized the uptime and reliability of each alternative. In ensuring minimal downtime and reliable infrastructure, we delved into the reputation and track record of each alternative to make certain they meet the essential criteria for consistent and dependable service.

Top Four Alternatives To Stripe & Square for Small Businesses

Togai

Togai is a usage-based metering and billing platform that caters to the complex needs of businesses with usage-based pricing models. It offers a comprehensive set of tools for data ingestion, processing, and transformation, enabling accurate and efficient billing management.

Togai's platform can process and enrich basic data into comprehensive billing metrics. Togai has a conversion logic, which can transform character counts into SMS billing units, factoring in different regional character limits to maintain accuracy across diverse markets.

The usage meter within Togai is adept at handling various billing metrics, accommodating maximum, minimum, and average calculations to suit different billing strategies. The platform supports a wide range of billable items, including:

• usage meters,
• fixed fees,
• licenses,
• credits, and
• named licenses.

Price planning in Togai is another area of strength, with the ability to configure intricate pricing models such as standard, volume, or tiered rates.

Key Features:

• Flexible event schema for capturing raw data from various sources
• Custom invoicing capabilities
• Push and pull mechanisms for data extraction
• Data enrichment capabilities for transforming basic event data into billable metrics. For example, event ingested can be in seconds but the business bills in minutes. Togai’s enrichments, allow the seconds to be calculated into minutes with formulas from the raw event data.
• Entitlements, credit grants, add-on purchases.
• Wide range of billable items, including usage, fixed fees, licenses, and credits
• Intricate price planning with support for multiple timelines within a single plan
• Custom integrations and workflows for tailoring the platform to specific business needs
• Detailed analytics and reporting features for insights into billing data.

Pros:

• Accommodates diverse data formats and sources through its flexible event schema
• Handles complex data structures and extracts relevant billing metrics from customer databases.

Paypal

Paypal is currently used in more than 200 countries, making it one of the oldest and largest payment providers in the world. Established in 1998, the company has grown considerably over the years. As of 2022, PayPal had earned itself more than 426 million active users worldwide. Today, it represents more than 50% of the online payment processing market.

Operating via its website and user-friendly phone app, the platform facilitates transactions through online money transfers via bank accounts, credit and debit cards, or within the account balance in customers’ PayPal accounts.
Paypal is one of the best alternatives to Stripe and Square, especially if you are involved in e-commerce and international trade. In terms of popularity, it is the most formidable competitor to both platforms, holding its ground as one of the world's most user-friendly and well-known payment platforms.

While PayPal has excellent B2C and P2P (Purchase to Payment) capabilities, it may not be suitable for B2B organizations. For instance, factors like Average Transaction Value and the charges imposed for other transactions and foreign exchange can pose significant challenges for organizations engaging in high-value transactions. Such hurdles are not suitable for B2B companies, which is why PayPal is ideal for B2C players like:

• Solopreneurs
• Occasional sellers
• Online and physical businesses

Advantages of Paypal

• It is trusted by millions of people all over the world. Paypal customers prefer paying through the app than divulging their payment details for e-commerce transactions.
• PayPal’s Seller Protection scheme provides a safe haven for sellers if buyers complain about missing purchased goods or transactions. Under this scheme, sellers receive their full payment as long as they fulfill PayPal’s requirements.
• By utilizing PayPal as a payment method for your vendors or suppliers, you can easily resolve the issue of cash flow gaps that arise due to payout delays. Simply utilize the funds in your PayPal balance to make payments, ensuring a streamlined and efficient process.
• PayPal has robust, watertight security measures with round-the-clock monitoring for all transactions. It immediately detects suspicious activities and protects against money-related scams and frauds. By using PayPal, you can have peace of mind knowing that your financial transactions are secure and your personal information is protected.

PayPal: Price Point

PayPal charges a merchant fee of 2.9% and a fixed fee for online transactions. The fixed fee depends on the country you send or receive the money from. The payment platform’s other fee structures include:

• 2.7% + fixed fee for instore payments
• 2.4% for QR code transactions below $10
• 1.9% + fixed price for transactions over $10

So, next time you're contemplating how to pay or receive funds, consider using PayPal for a hassle-free experience.

Braintree

Braintree is a payment gateway provider and a billing platform designed to accept online payments by storing credit card information from your system on a secure server. The platform is sponsored by PayPal and provides dedicated merchant accounts and several business-related services that PayPal doesn't.

Braintree is also known for its customer protection measures and account stability, which are available at the same price as Square and Stripe. Getting started is fast and easy, thanks to its efficient setup. The platform’s seamless integration with PayPal makes it an excellent choice for B2C businesses and for B2B organizations using a Software-as-a-Service (SaaS) model. The drawback, however, is that Braintree only caters to one part of a SaaS business’ revenue delivery infrastructure.

Braintree is an ideal choice if you want:

• A customized, dedicated, and stable merchant account
• Access to PayPal’s infrastructure
• Help to integrate with some functionalities
• A fundamental, easy-to-use platform
• To use Braintree without other payment services
• A platform that allows an average transaction of over $60

Braintree is advantageous for its:

• Intuitive customer portal that streamlines interactions with a unified login experience similar to that of PayPal.
• Pre-emptive transaction management enables snitch-free transaction cancellations before they are refunded, thus granting you incredible control over your financial transactions.

As far as the drawbacks are concerned, Braintree may not be ideal for its:

• Lack of SaaS subscription management solutions required for streamlined billing and pricing adjustments.
• Restricted API access limits pricing flexibilities and your ability to create and manage discounts and plans.
• Complex and confusing customer bank statements can make clarifying charges and other details labor-intensive.

Braintree Pricing

Braintree does not charge any monthly fee but charges you only based on what you use. This platform offers the following pricing plans:

• Standard rate: 2.9% +30 cents per digital transaction or card
• ACH deposits: .75% per transaction
• No fees for PayPal transactions, including PayPal credit

Braintree offers discounted rates under 501(C) for verified charitable organizations.

Also Read: Five Billing Alternatives to Aria Systems

QuickBooks

QuickBooks is highly popular amongst small businesses that rely on its software to handle their accounting procedures, from invoicing and payment processing to tracking cash flows.

This payment platform is the best fit for small businesses that require an accounting tool. Nevertheless, like any system, there are advantages and disadvantages to opting for QuickBooks over alternative entry-level solutions or more sophisticated ERP software. Also, you may find this platform restrictive if you are looking for HR management, e-commerce, and warehouse management solutions in one go.

Advantages of QuickBooks

Intuitive, user-friendly interface that allows you to learn and operate the platform without much hassles.

Works and integrates seamlessly with third-party applications to streamline business processes and increase adaptability.

• Budget-friendly tiers and cost-effective financial management tools that help SMEs.
• Real-time, robust reports that give you access to detailed and insightful financial reports to make informed decisions.
• Multi-device accessibility ( tablets, laptops, PCs, and smartphones) for better convenience.
• Error detection and correction features to ensure easy identification, remediation, and accuracy.
• Easy customer information retrieval for easy customer data reference. It helps you deliver personalized service and creates an effective communication channel.

If you choose QuickBooks, be prepared to face the following challenges:

• Minimal reporting capabilities that may not include crucial business and customer-related information.
• Unreliable, unstable software may likely cause system crashes and workflow and data integration disruptions.
• Restrictions in transaction volumes and limitations in software file size may not be compatible with high transaction volumes.
• Easy accessibility of error detection and correction may unintentionally enable unauthorized individuals to manipulate financial records.
• Without direct expert assistance, you may face difficulties in identifying and rectifying issues.

QuickBooks Pricing

QuickBooks pricing is very apt for small businesses. Their plan starts at $30 per month and can scale upto $200 per month, offering flexibility and value for startups and upcoming firms. Moreover, once you purchase the plan, you can access QuickBooks’s accounting platforms. However, you may be charged for add-ons like:

• Real-time bookkeeping support
• Employee payroll
• QuickBook integrations

The accumulation of these numerous small expenses can significantly increase your final bill, surpassing the expected monthly fee range of $30-$200.

Also, read our blog to discover the top billing software solutions tailored for small businesses and freelancers.

What’s The Perfect Square-Stripe Alternative?

It is understandable if you are in a dilemma to choose amongst the four options. To simplify the process, ask yourself these questions:

• What is my budget? How much can I spend per month, per transaction?
• What are my competitors’ payment platforms?
• How many invoices will I send?
• How can I take advantage of mobile transactions?
• How many customers will I serve on average?
• Do I require hardware to enable credit card payments?

By taking into account these questions and considering the unique requirements of your business or industry, you will be able to navigate your way toward discovering the optimal payment solution that suits you best.

Consider Togai For Your Billing Requirements

One of the easiest decisions you can make is to opt for our Togai. As the top-notch metering and billing software specifically designed for small businesses and freelancers, Togai caters to all your needs, ensuring comprehensive pricing solutions for every possible scenario. Furthermore, Togai is powered by a robust, secure, and reliable billing solution that supports your business through every phase for years to come.

Want to implement Togai? Schedule a demo now!

Frequently Asked Questions

What are the basic features of any billing system?

Running your business smoothly requires a solid understanding of what makes an effective billing system. Let us explore the core elements vital for your financial operations and customer relations

• Invoicing for generating clear, professional client bills.
• Multiple payment options, simplifying how clients settle invoices.
• Billing automation to save time and reduce errors.
• Customer management to track client data and financial records.
• Reporting and Analytics to gain insights into financial health.
• Tax Compliance Handles tax calculations and compliances accurately.
• Integration capabilities to seamlessly connect with other systems like CRM and accounting software.
• Customization and scalability to meet the evolving needs of your growing business.

Knowing these functionalities ensures smooth billing operations, letting you focus more on business growth than administrative duties.

What billing and pricing flexibilities does Togai offer to businesses compared to other payment processors like Stripe and Square?

Flexibility in billing and pricing greatly influences your profit margins. Togai offers a level of adaptability that differs from the rigid models of Stripe and Square, aligning with your business requirements and fluctuating market conditions.

Togai’s platform offers flexible billing models like usage-based billing, tiered pricing, and recurring payments. These adaptable pricing options allow you to cater to specific customer needs and market demands, potentially increasing customer satisfaction and revenue.

Such flexible options in Togai simplify moving away from rigid systems like Stripe or Square, meeting a broad range of business needs.

How does Togai ensure a smooth transition for businesses moving away from platforms like Stripe or Square?

Switching billing platforms can seem overwhelming. Togai eases this shift with dedicated support designed to minimize business disruption. Here is how Togai facilitates a seamless transition

• Personalized Setup Assistance Tailored guidance ensures your business's unique needs are met from the start.
• Robust Onboarding Process Comprehensive training and resources help your team master the new system efficiently.
• Ongoing Technical Support Continual assistance resolves operational glitches and optimizes the system to meet specific billing requirements.

These strategies ensure that transitioning from Stripe or Square to Togai is smooth and minimally disruptive, allowing your business to quickly adapt and continue operations seamlessly.

Can Togai’s billing platform help businesses improve their cash flow management?

Togai enhances financial stability with tools to improve cash flow management. Key features include

• Automated billing system schedules payments for better income predictability.
• Scheduled payments manages funds more effectively.
• Advanced forecasting tools uses billing and payment data to predict future financial scenarios, aiding strategic planning.

These tools not only improve financial predictability but also enhance your business’s ability to manage cash flow effectively, ensuring smoother operations as your business grows.

Does Togai offer solutions for businesses with fluctuating billing needs?

For companies facing variable billing demands, Togai’s adaptive system proves invaluable. It adjusts billing rates in real-time based on business performance and customer usage, allowing for modifications to billing cycles and pricing strategies that reflect current conditions.

Imagine peak customer activity during specific months. Togai's system will adjust charges accordingly, maximizing profits without manual adjustments. Conversely, it reduces rates during slower periods, enhancing customer satisfaction by preventing overcharges.

This dynamic approach streamlines operations and prevents revenue losses, making your billing practices a proactive part of your business strategy.

How does Togai support businesses with both subscription-based and one-time billing models?

Togai's versatile platform accommodates both recurring and one-off billing models, integrating different transaction types into a single system. This capability ensures smooth financial transactions, whether recurring or one-time events, enhancing your ability to adapt to market shifts.