Stripe’s limitations for usage-based billing

A common question we get is, "What's the difference between Orb vs. Stripe?" In short, Orb replaces Stripe Billing and integrates with Stripe Invoicing & Payments.

Orb is a state-of-the-art infrastructure built for usage-based billing. 

Our billing engine powerfully and flexibly transforms usage data into accurate invoices for companies with modern pricing. Orb can replace Stripe Billing for a good reason: Stripe was not originally purpose-built for usage-based billing, and that’s why it falls short.

Here’s a summary of Stripe’s key limitations that you’ll learn about in this article:

• Limited capacity for high-volume data ingestion: Stripe’s low rate limits can’t handle large event volumes effectively, creating bottlenecks for scaling companies.
• Rigid pricing models and metrics: Updating pricing attributes in Stripe requires reintegration, consuming time and resources.
• Lack of real-time visibility: Stripe provides only periodic usage summaries, limiting customer transparency and proactive monitoring.
• Inflexible billing structures: Stripe’s seat-based model restricts support for hybrid and dynamic pricing strategies.
• Minimal invoicing customization: Stripe’s invoicing lacks detailed line items and fractional billing, limiting transparency.
• Challenging plan management and versioning: Stripe requires manual re-configuration for pricing changes, creating friction for high-growth businesses.

Let’s get started with a brief introduction and some context to these limitations. 

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Stripe usage-based billing limitations: An introduction

Stripe was born into the era of seat-based subscription pricing in the early 2010s and is a best-in-class solution for payments. 

From payments, Stripe expanded to offer adjacent products like billing services to support the explosion of companies built on per-seat models in the last decade.

What has changed?

Modern pricing in 2024 is evolving as SaaS price models move away from seat-based subscriptions towards hybrid and usage-based pricing, especially for companies with AI offerings. 

Today’s market pressures call for teams to ditch legacy tools like Stripe Billing in favor of a proven tool designed for today’s needs. Using Stripe to solve usage-based billing is like having a rigid tool for a business-critical job that requires speed, flexibility, and accuracy. 

Why does Stripe fall short?

Stripe falls short at the foundational level because its billing system is deeply rooted in a metered, linear billing model that limits its functionality when usage billing is required.

Stripe lacks essential features like high-frequency data ingestion, dynamic plan changes, and granular tracking of customer usage. In short, while Stripe remains a solid solution for simple, seat-based billing, it often doesn’t suit complex, usage-based needs.

We’ve compiled our top insights on where Stripe struggles and how Orb is uniquely equipped to tackle the complexities of usage billing. Here’s a breakdown of the limitations and how Orb addresses them:

Reason 1: Stripe lacks scale in data volume ingestion

Usage billing requires platforms to process massive volumes of usage events in real time to ensure accurate invoicing and reporting. 

While Stripe has improved its API rate limits, its architecture, originally designed for simpler subscription models, can present challenges for businesses with extremely high data ingestion needs, particularly when it comes to real-time event processing and aggregation.  

This constraint creates bottlenecks for companies with large user bases and high usage rates, such as cloud infrastructure, AI, and data management.

Why Stripe’s usage-based billing is outdated

As a product designed for the era of seat-based subscription models, Stripe simply didn’t need the data architecture to support high event volume. It was made to simply count the number of seats per account. 

When you’re dealing with usage tracking, the last thing infrastructure engineers want to hit are limits on data volume and request throughput because it requires them to build their own data pipelines outside of Stripe – adding just another failure point to monitor and maintain. 

The Orb difference

Orb was designed with a data infrastructure that handles massive volumes at scale. Our platform supports up to 250,000 events per second and can even reach millions of events per second for high-demand cases. 

Orb is ideal for companies that need to track high-velocity data without compromising billing accuracy.

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Reason 2: Difficulty of updating pricing metrics and attributes

Stripe’s metered billing model ties how you track billable usage to your pricing model, which makes it challenging to update individual metrics or billing attributes as your business evolves. 

An example of how Stripe falls short when updating pricing metrics

At setup, a company might define a billable event generally as “GB used.” But soon, they might realize that it’s more profitable to charge based on “GB used per region” where data is being geographically accessed. 

To alter this definition in Stripe’s setup would require a full reintegration, consuming time and engineering resources to redefine usage events for new metrics.

The Orb difference

Orb’s flexible approach eliminates these challenges by allowing customers to dynamically adjust billable metrics using custom SQL-based metrics.

This feature enables teams to evolve their pricing models without complex re-integrations, freeing up engineering resources and allowing companies to respond swiftly to market demands. 

Stripe usage-based billing, by contrast, remains constrained by its inflexible billing structure.

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Reason 3: Blurred visibility with Stripe

Usage-based billing thrives on real-time transparency, as it allows customers and companies to monitor and react to usage at the moment. Stripe usage-based billing, however, only provides periodic summaries of usage data through its API.

This limitation means that companies can’t react instantly in notifying customers as they approach specific usage and cost thresholds, nor can teams like sales and customer success swiftly upsell customers when they overspend their prepaid usage. 

The Orb difference

Orb, on the other hand, empowers businesses with real-time usage tracking alerts through customizable dashboards. These features help customer success and sales teams monitor usage trends, proactively address customer needs, and maximize upsell opportunities. 

Unlike Stripe usage-based billing, Orb’s transparency builds trust with customers and empowers them to understand and control their usage in real-time, build trust, and prevent fraud.

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Reason 4: Stripe is built for seat-based billing, not usage-based billing

One of Stripe's issues is its lack of support for pricing models. Stripe was originally designed for seat-based subscriptions, and this structure inherently limits its flexibility for modern pricing strategies like hybrid models or pay-per-use. 

Stripe enforces uniform billing periods across products in a subscription, so companies offering products with different billing intervals must create separate subscriptions, complicating both setup and customer management.

The Orb difference

Orb supports hybrid billing models that mix seat-based subscriptions with usage billing. This approach is ideal for SaaS and AI companies looking to implement dynamic pricing structures that scale with user engagement. 

With Orb, companies can create tiered pricing plans, mix and match billing intervals, and handle complex billing without workarounds, ensuring flexibility as businesses grow and product lines expand.

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Reason 5: Limited customization in invoicing and reporting

Stripe usage-based billing doesn’t allow for advanced customization, which becomes a challenge for companies requiring granular invoicing and reporting. 

For instance, Stripe’s invoicing system doesn’t support fractional billing, which is often critical for companies billing per event or usage unit. Stripe also lacks the ability to provide itemized visibility across regions or usage categories, making it hard for users to fully get their charges.

The Orb difference

Orb’s invoicing is highly customizable, supporting fractional billing, detailed line items, and custom attributes. Companies using Orb can present each usage metric clearly, giving customers transparency and confidence in the accuracy of their invoices. 

This capability is invaluable for companies seeking to establish clear, detailed, and precise billing practices that meet modern customer expectations, a feature Stripe usage-based billing lacks.

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Reason 6: Challenges in managing pricing plans and versioning

As companies scale, their pricing strategies must often evolve to keep up with new products, market trends, or customer needs. When it comes to updating or migrating entire pricing plans, Stripe usage-based billing proves particularly cumbersome. 

Companies often need to launch new product lines, implement tiered changes, or introduce customer-specific pricing, and Stripe requires manual re-configuration and re-integration for each plan transition.

This process creates friction, especially for high-growth businesses that need to frequently adapt their pricing to remain competitive.

The Orb difference

Orb’s plan versioning feature lets companies manage multiple pricing versions. With Orb, companies can create, adjust, and backdate new plan versions without disrupting current customers. 

Teams can transition subsets of customers to updated plans, schedule future changes, and maintain control over legacy plans. This feature is useful for companies launching products or adjusting pricing tiers, as it allows them to evolve billing strategies without engineering hurdles. 

Orb’s approach gives companies control over plan versioning and ensures smooth transitions for customers, which Stripe usage-based billing does not support effectively.

If you’d like to discover more about what to watch out for when using Stripe for usage billing, we encourage you to read our in-depth review of Orb vs. Stripe.

Orb solves issues behind Stripe usage-based billing’s limitations

Tackling usage billing on your own or attempting to make Stripe fit your usage-based model can be a significant challenge, especially as your company scales.

Fortunately, Orb was built specifically to address these exact pain points. Leading companies like Perplexity and Vercel have entrusted Orb to power their pricing engine, benefiting from its flexible, comprehensive approach to usage billing. Here’s how Orb helps you overcome these common hurdles with ease:

• Seamless data ingestion: With Orb’s robust APIs and integrations, usage data flows effortlessly from your app, data warehouse, or storage like S3 and Segment. 
  
  Unlike Stripe’s usage-based billing, which caps API requests, Orb allows you to scale up to hundreds of thousands of events per second, giving you peace of mind that every data point will be captured accurately.

• Flexible metric definition: Rather than pre-defining billable events and undergoing re-integration for any change, Orb’s SQL-based custom metrics let you adapt your pricing as your business evolves. 
  
  You can easily track anything from API calls to storage consumed, with Orb handling each metric effortlessly.

• Intuitive pricing plan creation: With Orb’s Plan Builder, creating intricate pricing strategies — whether tiered, usage-based, or hybrid models — is fast and simple, with no coding required. 
  
  Orb supports everything from fractional billing to region-based pricing, letting you respond to market demands and customer feedback without limits.

• Automated billing process: Orb simplifies the entire billing cycle, from real-time usage tracking to accurate invoice generation. It applies discounts, adjusts for tiered usage, and handles any customizations with ease.
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• Real-time customer visibility: Orb provides user-friendly dashboards, giving your customers transparency and real-time insight into their usage data. 
  
  Unlike Stripe’s usage-based billing, which relies on periodic summaries, Orb’s live data access builds trust and allows customers to monitor their usage and costs anytime.

• Detailed reporting and analytics: Analyze billing accuracy, usage trends, and revenue generation with Orb’s reporting tools. These insights empower finance, sales, and customer success teams to make data-driven decisions quickly and confidently.
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• Quick adjustments with plan versioning: When it’s time to update pricing plans or make strategic adjustments, Orb’s plan versioning feature allows you to transition customers seamlessly without disrupting workflows. 
  
  Schedule, backdate, or cancel changes on demand, adapting to your evolving pricing needs without skipping a beat.

Ready to experience the ease and flexibility of a true usage-based billing engine? Start your 30-day free trial with Orb today and see how our platform can transform your billing into a competitive advantage. Check out our pricing options to find a plan that fits your needs as well.