SaaS payment gateway: how to choose one for subscriptions

Choosing a payment gateway feels like the big decision. For a SaaS company, it usually isn’t.

The gateway collects the customer’s card details and hands them on for authorization, and that’s most of its job. What decides whether your subscription revenue holds up is everything around it: how stored cards are kept, what happens when a renewal is declined, whether expired cards get updated, and what you can do when your provider has a bad day.

That’s because a subscription isn’t one payment. It’s the same payment, attempted every month for years, on a card that will expire at some point. A gateway that’s perfectly good for one-off sales can be a poor fit for that.

We’ll be upfront about the state of this topic. Nearly every guide to SaaS gateways we read was written by a company that sells one, and it shows. Their product sits near the top, the prices have no date, and nobody explains how the list was put together.

We’ve tried to do it differently. This guide explains the terms plainly, shows where your billing system fits, and looks at what recurring payments change. It reports what each major provider says about subscriptions in its own documentation, and it includes a fee example with the rates and the date we checked them, so you can follow the arithmetic.

We haven’t ranked anyone. A ranking without a method asks you to take our word for it, and that’s the problem we’re trying to avoid.

We should also say that we make billing and payments software, so we’re not a neutral party on everything. Where we give an opinion, we label it “our view” and show the reasoning, so you can disagree with it.

The short version.

• The gateway is one layer. It collects payment details and forwards them. A processor, an acquirer and a billing engine do other jobs.

• Renewals change the test. They are charges you trigger without the customer present, so stored cards, network tokens, card updates and retries matter more than the headline rate.

• Compare like with like. Gateway-only, all-in-one and merchant-of-record pricing cover different things, so a lower percentage can still cost you more.

• Own your tokenization. If your stored cards only work with one provider, you’re locked in. Ask in writing whether they can leave with you, because most providers don’t publish the answer.

What is a SaaS payment gateway?

A payment gateway is where payment details are collected and forwarded to a processor, whether that’s on a website, in an app or on a terminal. Adyen describes the processor as the backend that routes transaction data between the gateway, the card networks and the banks, and relays the approval or decline.

The “SaaS” part matters because of what happens after the first payment.

A one-off sale needs one successful authorization. A subscription needs that authorization, then a stored credential, then a charge every period with nobody there to type a card number, and then a plan for the day the card expires or the bank says no.

Gateway, processor, acquirer and the other terms

These words overlap, and providers use them differently. The table gives working definitions, with the source where we could check it on the provider’s own page.

Providers also draw the lines in different places. Adyen, for one, describes itself as gateway, processor and acquirer in one platform.

Where the billing system fits

A billing engine and a gateway do different jobs, and mixing them up is where a lot of confusion starts.

Stripe’s documentation puts it plainly: when you create a subscription, Stripe generates invoices, attempts to collect payment and manages the subscription’s status, and retry logic and dunning are handled by Stripe Billing. Recurly and Chargebee work the other way round. They’re billing layers that send transactions to the gateway accounts you’ve connected.

So the billing engine decides what to charge and when. The gateway and processor path moves the money. Some products bundle the two and some keep them apart, and that choice affects everything that follows, including who controls retries and where your stored cards live.

Our view. Decide how you want billing and payments to fit together before you compare gateways. It’s much easier to pick a gateway once you know which system is in charge of retries.

What makes subscription payments different

Five things change once payments recur.

Customer-initiated and merchant-initiated payments. The first payment is customer-initiated: the customer is there and agrees to save their details. Renewals are merchant-initiated, which means you trigger the charge without them.

Worldpay’s documentation names the usual reasons as subscription, instalment and unscheduled, and says later payments are linked to the first by a scheme reference. Stripe describes the same split as off-session payments, which need the customer’s agreement on permission, frequency and how the amount is worked out.

Strong customer authentication. In regions that apply it, card payments use 3D Secure. Stripe’s advice is to authenticate once while saving the card, then use it off-session. Exemptions aren’t guaranteed, and a bank can still ask for authentication. A successful 3D Secure payment moves fraud liability to the issuer, but an exempted payment doesn’t get that shift.

Network tokens. A token issued by the card network stands in for the card number. Adyen says network tokens are independent of the physical card’s expiry date, and Checkout.com says each cryptogram is unique to the token, the merchant and the transaction.

Account updater. A service that gets new card details, such as a new expiry date or a replacement card, from the card schemes and updates the stored card. Adyen, Stripe and Braintree each document a version.

Retries. Renewals fail for soft reasons all the time, so retrying is part of collecting the money. Stripe’s Smart Retries default for new accounts is up to 8 retries within 2 weeks, and a custom schedule allows up to 3. It doesn’t retry after hard decline codes, such as a stolen card.

Vendors claim big improvements from network tokens and account updaters, but nobody has measured them independently. Stripe’s 2023 announcement says about 40% of cardholders replaced a card in the prior year, and quotes one customer, Doist, reporting subscription authorization rates up by over 4%.

That’s one customer with no baseline. We’d treat it as an example, not a benchmark.

What providers say about recurring payments

This table records what each provider says in its own documentation, as we read them on 10 November 2026.

How gateway fees work, with a worked example

Published pricing comes in a few shapes.

• A percentage plus a fixed fee per card transaction. Authorize.net’s all-in-one plan is 2.9% plus 30 cents.

• A fixed fee plus pass-through costs. Adyen charges $0.13 plus the payment method fee, and for Visa and Mastercard that fee is interchange plus a 0.60% markup.

• A gateway-only monthly fee plus a per-transaction fee, with the merchant account priced separately. Authorize.net’s gateway-only plan is $25 a month, $0.10 per transaction and $0.10 per daily batch.

• Extra charges for add-ons, international cards, currency conversion, disputes and failed payments.

Here’s a worked example. A SaaS company processes 1,000 successful renewals of $50.00 in a month, all domestic, with one batch a day for 30 days. The rates come from each provider’s pricing page as seen on 10 November 2026. The table leaves out interchange and scheme fees where they aren’t published, monthly add-ons, refunds, disputes and failed payments.

Check one row. 2.9% of $50 is $1.45, plus $0.30 is $1.75. Across 1,000 renewals that’s $1,750, plus the $25 monthly fee makes $1,775, or 3.55% of $50,000.

Please don’t read this table as a league table. It isn’t like for like.

The gateway-only row looks cheap because the merchant account is priced elsewhere. Adyen’s figure leaves out interchange, which is the biggest part of a card fee. GoCardless is bank debit, not cards. Paddle is a merchant of record, so its price includes services the others don’t.

We left Stripe and Braintree out of the table because we couldn’t read Stripe’s US pricing page or Braintree’s fees page when we checked, and we weren’t willing to quote a rate from a third party. Check each provider’s current page before you decide.

Our view. The headline rate is the least useful number on a pricing page. Work out the effective rate on your own volume, then ask what the price does and doesn’t include.

Merchant of record or not

A merchant of record is the entity that is the seller on the transaction. Paddle’s pricing page describes “Paddle as your Merchant of Record” and lists fraud protection, chargeback handling and buyer support.

Stripe’s documentation lists something similar for its Managed Payments product, where Stripe is the merchant of record. It applies to digital products, leaves out some Billing flows, and supports subscriptions through Checkout or Payment Links. For standard Stripe payments, your business is the merchant of record.

This isn’t a gateway decision in the narrow sense. But it changes what you’re responsible for and what you pay for, so settle it first.

Using more than one gateway

Plenty of SaaS companies end up wanting a second gateway, for resilience, for coverage in other markets, or for cost. The documentation we read says it’s possible, but there are strings attached.

The common sticking point is token portability.

A token issued by one provider generally works only with that provider, so a stored card that can’t move is a form of lock-in. Network tokens aren’t tied to one provider, which is why Recurly’s documentation points to them. But how well they travel between providers isn’t described in the Stripe, Braintree or Adyen documentation.

Our view. Own your tokenization. If a gateway holds your stored cards in a form that only it can use, you’re locked into that gateway, and this is a big trap that many SaaS companies fall into.

Keep control of the vault, or use one that isn’t tied to a single provider. Then you can move, add a second provider or negotiate from a position of strength.

And treat “can my stored cards leave with me?” as a question for day one, not the day you’re unhappy. Ask each provider in writing and keep the answer.

For the design side, see our guide to payment gateway failover. For the wider idea of coordinating several providers, read our guide to payment orchestration.

A checklist for choosing a gateway

Put these questions to every provider you’re considering. Where we found documentation for a question, it’s covered above. The rest need a written answer.

1. Billing engine or gateway? Which product decides amounts, proration and invoice states, and which one moves the money?

2. Merchant of record? Who is the seller of record, and what’s excluded?

3. Token portability and export. Can you export stored cards, what gets left behind, and can the tokens be used at another provider?

4. Network tokens. Which networks and regions, whether provisioning is automatic or opt-in, and who owns the token.

5. Account updater coverage. Which networks, regions and fees, and whether wallets and prepaid cards are covered.

6. Retry control. The schedule, the number of attempts, who decides, and how hard declines are handled.

7. Decline code detail. Whether you get issuer codes or only generic reasons. Without the raw codes, you can’t build your own retry rules.

8. Failover and multiple providers. What’s supported, on which plans, and with which exceptions.

9. Settlement currencies and payout timing. Which currencies you can hold, and when the money arrives.

10. Disputes and chargebacks. Fees, tooling and who handles them.

11. API and webhooks. Whether failed payments, retries and token updates produce events your systems can use.

12. Fraud tools and 3D Secure. Who bears liability, and whether exemptions are your call.

13. Reporting. Reconciliation by payout, decline reports and updater reports. Ask for sample exports.

14. PCI model. Hosted page, hosted fields or direct entry, and which self-assessment applies. Confirm the current criteria with your acquirer.

15. Contract shape. Monthly fees, minimums and closure fees.

16. Reliability. Historical incident reports and service-level terms. None of the providers’ documentation publishes these, which tells you something.

Numbers you’ll see that we couldn’t source

Vendor guides repeat statistics that we couldn’t trace to anything, so we haven’t used them.

• Stripe’s US card rate of 2.9% plus 30 cents, and its international and conversion surcharges. Stripe’s US pricing page couldn’t be read when we checked, and the figures only appear in secondary summaries.

• Braintree’s headline rate, because its fees page couldn’t be opened.

• “Failed payments put as much as 10% of revenue at risk”, from a vendor blog with no source.

• Country counts for individual gateways, which contradict each other across vendor sites.

• Claimed recovery rates such as “up to 70% of failed payments”. That’s vendor marketing with no method behind it.

• Any “best gateway” ranking. None of the lists we reviewed explained how they were scored.

Frequently asked questions

What is a SaaS payment gateway?

It’s the part of the payment chain that collects a customer’s payment details and forwards them to a processor for authorization. For SaaS, the more useful question is how your provider handles stored cards, renewals, retries and card updates, because those decide how much of your recurring revenue you actually collect.

What is the difference between a payment gateway and a payment processor?

The gateway collects and forwards the payment details. The processor is the backend that routes the transaction data between the gateway, the card networks and the banks, and passes back the approval or decline.

Do I need a merchant account?

It depends on the product. Some providers bundle the merchant account with the gateway, and others sell the gateway alone and expect you to have your own. Authorize.net prices the two options separately, which is a handy way to see the split.

What is a merchant of record?

The entity that is the seller on the transaction. With Paddle, and with Stripe’s Managed Payments product, the provider takes that role. With standard Stripe payments, your business is the merchant of record.

What is the difference between a billing system and a payment gateway?

A billing system decides what to charge and when, and creates the invoices. A gateway moves the payment. Stripe combines both in one platform, while Recurly and Chargebee are billing layers that send transactions to gateways you connect.

Why do subscription payments fail?

Cards expire or get replaced, issuers decline for temporary reasons, and sometimes the money isn’t there. Network tokens, account updaters and well-timed retries help with the first two. Our guide to dunning management covers the recovery process.

Can I use more than one payment gateway for subscriptions?

Yes, with limits. Failover features are often plan-gated and have exceptions, and stored cards may not move between providers. Ask each provider whether tokens are portable before you commit.

Are there hidden fees?

Look for monthly fees, per-batch fees, add-on fees such as card updates, international card and currency conversion surcharges, and fees for disputes and failures. Compare the all-in effective rate on your own volume.

What is the best payment gateway for SaaS?

We don’t think there’s a single answer, and we haven’t ranked providers. It depends on your markets, volume and billing model, and none of the published rankings we reviewed explained how they were scored. Use the checklist above and get the answers in writing.

Key takeaways

• The gateway is one layer of the payment chain, and for most SaaS companies it isn’t the layer that decides how much revenue you keep.

• Renewals are charges you trigger without the customer present, so token portability, network tokens, card updates and retry control matter more than the headline rate.

• Compare fees on your own volume. In our $50 example the effective rate ranged from 0.26% to 6.00%, because the options cover different things.

• A second gateway is possible but comes with conditions: failover is often plan-gated, has stated exceptions, and depends on whether your stored cards can move.

• Own your tokenization. If a provider holds your stored cards in a form only it can use, you’re locked in, so ask in writing whether they can leave with you and keep the answer.

If you do one thing after reading this, pull a month of your own payments. Split the declines into soft and hard, and note how many renewals rely on stored cards. That tells you which of the sixteen questions matter most for you, and it’s a better starting point than any comparison table, ours included.

If you’d like billing and several gateways to work together instead of one at a time, take a look at how OpenByte approaches payment orchestration for subscription businesses.