8 reasons to avoid usage-based billing with Stripe

Stripe is a household name in the SaaS industry. But does its popularity translate to being the best option for usage-based billing? Not quite. 

While Stripe boasts a wide range of features, it falls short in several key areas regarding this specific billing model. In this article, we'll examine why usage-based billing with Stripe isn’t the best idea. 

But first, let's get a clear understanding of what Stripe is and what it offers.

What is Stripe?

Stripe is a major player in the online payments world, especially for B2B companies. However, Stripe doesn’t just handle payments. It offers a whole toolbox of features, including billing, invoicing, and even tools to help with sales tax.

One of Stripe's standout features is its focus on developers. This means they offer tools that are easy for engineering teams to work with, making it simpler to add Stripe's features to existing websites and apps. They also have a global support team available around the clock to help if anything goes wrong.

However, Stripe isn’t the best choice for usage-based billing. In the next section, we'll explain why.

8 reasons to avoid usage-based billing with Stripe

Let's take a closer look at why Stripe might not be the right fit for your usage-based billing needs:

1. Limited capacity for data ingestion

Usage-based billing relies on tracking a high volume of usage events. Stripe's infrastructure isn't built to handle the scale of data that this model demands. This limitation can lead to bottlenecks, errors, and ultimately, inaccurate billing.

Why Orb is better: Orb is designed from the ground up to handle massive volumes of data, guaranteeing accurate usage tracking even at high scale.

2. Inflexible pricing structure

Usage-based billing often requires frequent pricing adjustments to align with market trends. With Stripe, changing your pricing model involves re-integrating the entire system. This process can be time-consuming and costly, so avoiding it is desirable.

Why Orb is better: Orb allows for on-the-fly pricing changes without complex re-integrations. This allows you to adapt your pricing as your business scales up.

3. Lack of real-time visibility

One key benefit of usage-based billing is the ability to give customers real-time visibility into their usage and costs. Stripe also falls short in this area, offering only periodic summaries of usage data. 

This lack of transparency can lead to customer dissatisfaction and disputes. One reviewer expressed their frustration with Stripe's reporting capabilities: 

"Stripe might be a good payment platform, but [the] reporting module is horrible."

Why Orb is better: Orb provides real-time usage tracking and alerting. It empowers you and your customers with up-to-the-minute insights into usage and costs.

4. Designed for seat-based billing

Stripe's architecture is fundamentally built for seat-based subscription models. We mean the billing method where customers are charged a fixed fee per user. 

This design philosophy doesn't translate well to usage-based billing. This is because it requires a more granular and flexible approach to tracking and charging for usage. 

Why Orb is better: Orb is purpose-built for usage-based billing. Its features and capabilities cater specifically to this pricing model's unique needs.

5. Security concerns and account stability

Several user reviews highlight concerns about Stripe's security practices. Some even have publicly denounced Stripe for mishandling their accounts. One user shared a harrowing experience:

"I never thought I'd write this review. When I chose Stripe, I ignored the negative reviews, thinking they couldn't be true... [...]

We recently launched our brand, and everything was fine until our first verification. We were locked due to ‘high-risk potential.’ Support helped sort it out, and after two days, my account was reinstated.

Then, I was locked again for a ‘routine review’ for the same reason. This time, only chatbots replied, and now they ignore my emails. 

The worst part is our brand reputation is being destroyed. Some customers want refunds, they return our products, and we can't refund them because we don't have access to our account."

Multiple users also reported sudden and unexplained account freezes. Some of these have caused major disruptions to their businesses.

It's important to clarify that these reviews represent individual experiences. However, they still raise valid concerns about Stripe's ability to safeguard user data and meet service demands.

Why Orb is better: Orb prioritizes security and reliability. It gives you peace of mind that your billing data and customer information are always protected.

6. Metered billing limitations

Usage-based billing with Stripe has inherent limitations. It tightly couples usage tracking with current pricing, making it difficult to evolve pricing strategies over time. 

For example, let's say you initially define a billable event as "GB used." Later, you want to charge based on "GB used per region." This is where issues appear, as you would need to re-implement your entire Stripe integration.

Why Orb is better: Orb's flexible data model allows you to define and modify billable metrics using SQL. You don’t need any re-integration. This allows you to adapt your pricing as your business needs change.

7. Lack of transparent communication

Stripe has been criticized for its lack of responsiveness, especially regarding account issues or disputes. Users have reported being locked out of their accounts with little explanation and unhelpful responses from customer support.

 One user warned:

"Read the terms and conditions before engaging in this service. If you do not, you will be a willing co-conspirator in your misery. ... There is no appeal and no review of decisions made by Stripe."

Why Orb is better: Orb emphasizes clear communication and transparency. It gives users the information and support they need to manage their billing effectively.

8. Outdated for modern pricing needs

Stripe was built in an era when seat-based subscription models were dominant. However, modern businesses are increasingly adopting usage-based and hybrid pricing models. This is especially true for those leveraging AI. 

Stripe's legacy infrastructure struggles to keep up with these ever-changing needs.

Why Orb is better: Orb is designed for the modern usage-based and hybrid pricing era. Because of this, it provides the scalability businesses need to thrive in today's competitive landscape.

Benefits of moving from Stripe to usage-based billing with Orb

Orb is a done-for-you billing platform created to make usage-based billing simple. It's a dependable solution that lets businesses focus on what they do best while guaranteeing accurate and clear billing.

Orb makes usage-based billing easier with these key features:

• Billing done right: Orb carefully tracks and records every billable event. This way, it guarantees precise billing and clear invoices for your customers.
• Pricing that grows with you: Orb's adaptable plan management lets you create and adjust various pricing tiers. This means your pricing and your business evolve hand in hand. 
• Clear usage insights: Orb doesn't just track usage. It turns raw data into useful insights. This is especially helpful for products with detailed usage patterns.
• Easy connections: Orb easily integrates with popular data warehouses and accounting tools, simplifying operations and reducing the need for multiple software apps.
• Your metrics, your way: Orb has an easy-to-use interface and custom SQL editor so that you can define your own unique usage metrics and pricing models.

Discover how Orb can help you build a strong and customer-focused usage-based billing strategy. Check out Orb’s demo here.