Chargify: (Another) Billing App and API for Small Web and SaaS Companies

Written by Jolie O'Dell / September 22, 2009 6:50 PM / 11 Comments

From small-business support company Grasshopper comes Chargify, a billing and subscription system for web 2.0 and SaaS companies that eliminates the need to build bespoke applications.

Their RESTful API and hosted payment solution permit simple integration into any website, allowing businesses to charge customers on a recurring basis, manage subscriptions, achieve PCI compliance, and gain real-time business intelligence from their billing.

In addition to processing one-time and recurring transactions, Chargify handles free trial periods, promotions, refunds, receipts, and reminders.

Also, their pay-as-you-grow pricing seems ideal for small businesses and startups. The first 50 customers are free and range up to $1,500 for 15,000 customers or $2,500 for an unlimited number of customers. Chargify does not charge individual transaction fees.

Take a look at this demo video from the Chargify team:

The API accepts method calls via HTTP and returns responses as JSON or XML, allowing companies to keep the customer purchase flow on their own sites and authenticate users while passing the billing information to Chargify for processing.

Interested parties can sign up for the service, still in beta, at the Chargify website.

Now, it goes without saying that Chargify is far from the first billing software for small- and medium-sized businesses; competitors such as FreshBooks are fast becoming well-known heavy hitters in the space. We also found a couple billing services that offer an API - the Dutch MoneyBird, and two English-language services, Zuora and Vindicia. What - if anything - makes Chargify truly competitive in this increasingly crowded space?

Let us know your thoughts in the comments - especially if you have experience with using any of these online billing services!

Comments

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There are a host of other issues Web 2.0 and SaaS companies need to think about: how they accept international payments; how they deal with credit card failures in their payment network; how sales tax changes within states impact them; and even how they change business (and therefore billing) models. Managing these issues is the key to driving customer acquisition and retention in a SaaS-based environment.

Posted by: Sanjay Sarathy | September 22, 2009 8:01 PM

There's also CheddarGettar.com & Spreedly.com.

Posted by: Andrew | September 22, 2009 8:07 PM

Seems like Chargify handles credit failures with dunning which is great - been looking for that for a while.

My experience with Freshbooks is really just for invoices. I didn't know/ think they did recurring billing.

I have heard about CheddarGetter previously interested to check out Spreedly and see how they all compare.

Posted by: Francis | September 22, 2009 8:26 PM

There are many important factors when billing for SaaS companies and other recurring revenue business models that we have learned over the years. After billing millions and millions of transactions a month and all the payment failures, fraud, and other fun stuff we are able to build that into a system for others to use.

International merchant accounts will be supported and is a growing segment in the start-up and web app space.

There are many people out there doing great stuff with invoices (FreshBooks) and even on a recurring basis, but this is different than true recurring billing to a credit card based on plans with discounts, offers, and all the fun stuff beyond a simple amount to charge.

Look forward to feedback about what we can do better, you can contact me directly or put the feedback on Twitter, @dh or @chargify

Posted by: David Hauser | September 22, 2009 8:29 PM

How does Freshbooks play in this space? I'm not sure that they do...

Posted by: Adam | September 22, 2009 8:42 PM

I'm not really sure how you can say this space is crowded. Your primary example Freshbooks serves a completly different purpose. The other you mention are hardly integrated solutions but raw and open source APIs and one's Dutch.Increasingly crowded space?

Posted by: Jonathan Mendez | September 22, 2009 8:43 PM

After billing millions and millions of transactions a month and all the payment failures, fraud, and other fun stuff we are able to build that into a system for others to use.

Posted by: aion kinah | September 23, 2009 1:32 AM

Hey folks, Sunir from FreshBooks here.

I see the confusion in the comments about how we play in this space. We need to do a better job of advertising this, but many companies use FreshBooks for their web app billing. We've blogged about it before:

http://www.freshbooks.com/blog/2008/08/15/using-freshbooks-for-your-web-applications-billing/

I'm happy to take questions about how it works either here in the comments or by email: sunir splat freshbooks dot comm

Posted by: Sunir Shah | September 23, 2009 8:36 AM

There is a big difference between sending an invoice that someone has to pay compared with billing a credit card and then sending them a receipt. That is the difference here, so yes FreshBooks can do parts of this but not best practice billing for web applications.

Does FreshBooks use their own APIs and billing to bill their own customers?

Posted by: David Hauser | September 23, 2009 4:40 PM

I think the biggest difference is flexibility and price. Call up Zuora or Vindicia and see what the startup costs are. Let's just say a YC company would have to give up pretty much their entire capital investment—before even taking a single payment.

The other big difference I think is the sophistication of the dunning management.

Posted by: Don | September 25, 2009 2:52 PM

This is an awesome initiative. One would think that all SaaS providers would easily grasp the benefits of open API. I guess some need a little more encouragement.

Keep up the great work pioneering in this space – SaaS is undoubtedly democratizing access to enterprise class software and infrastructure. Driving down cost ($ and time) of backend functions leads to more time for creativity and innovation which ultimately increases the wealth of our societies! I like that…

Posted by: Folsäure | January 12, 2010 4:39 AM