Compare Payment Gateways for Subscriptions
Subscription billing goes beyond a basic card charge. You need trial management, proration when a customer changes plan, dunning for failed payments, tax across jurisdictions, and reporting that separates new MRR from churn and expansion.
Two cost models sit below. Stripe Billing and GoCardless charge per transaction; Chargebee and Recurly add a platform fee on top of whatever gateway you run. Which is cheaper for you depends on your revenue and how much billing logic you would otherwise build yourself.
| Provider | Model | Dunning | Tax handling | Settlement | Best fit |
|---|---|---|---|---|---|
| Stripe Billing | Gateway + billing | Smart Retries | Stripe Tax add-on | T+2 | Under ~$30k/month MRR |
| GoCardless | Direct Debit | Limited (no Bacs retries) | Via your stack | T+3 (Bacs) | B2B, ARPU above £100/month |
| Chargebee | Platform over a gateway | Full workflows | EU VAT OSS + US sales tax | Via gateway | Above ~$30k/month revenue |
| Recurly | Platform over a gateway | Configurable + recovery | Via gateway | Via gateway | £500k+ ARR, high volume |
| PayPal Subscriptions | Wallet + card | Basic retry | Via your stack | Minutes to PayPal | Consumer B2C, supplementary |
Chargebee and Recurly sit above a payment gateway (often Stripe), so their platform fee is on top of card processing. Verified May 2026.
Best Payment Gateways for Subscriptions
We ranked these on the cost and capability your subscription actually needs at your stage, not the headline rate. For most teams you should start on Stripe Billing and add GoCardless for your higher-value B2B contracts. Here is the case for each.
Best Overall for Subscriptions: Stripe Billing
Stripe Billing. Adds a 0.5% surcharge per invoice on top of Stripe’s standard card processing (1.5% + 25p for UK cards). It covers trials, usage-based billing, proration on mid-cycle plan changes, coupons, invoicing and Smart Retries for failed payments.
For a team building a subscription product with developers, it is the fastest path to a complete billing system without a separate management platform. At scale the 0.5% adds up: £100,000/month in subscriptions is £500/month in billing fees alone, plus the card rate.
Not right if: you process above roughly £100k/month and need heavy dunning or tax workflows. At that point, Chargebee or Recurly over Stripe as the processor can cut the cost.
Visit Stripe BillingBest for Direct Debit Collection: GoCardless
GoCardless. Uses UK Direct Debit (Bacs) rather than card charging, at 1% + 20p capped at £4. A £200/month subscription costs £4 versus £3.25 on Stripe, but a £1,000/month contract still costs £4 against £15.25 on Stripe.
For B2B SaaS and professional subscriptions where the customer is a business with predictable cash flow, the cap makes it substantially cheaper. The constraint is the Bacs timeline: three working days from instruction to cleared funds, plus an advance notification before each variable collection.
Not right if: you run consumer subscriptions where customers expect instant access on payment. Card billing fits that better.
Visit GoCardlessBest Subscription Management Platform: Chargebee
Chargebee. A dedicated platform that sits above a gateway (Stripe, Braintree, Adyen). It adds a product catalogue, hosted checkout and customer portal, full dunning workflows, EU and US sales-tax handling, and revenue reporting with MRR, ARR, churn and cohort analysis.
Pricing starts at $249/month for the Performance tier, worthwhile above roughly $30,000/month in subscription revenue. The self-serve customer portal alone, which lets subscribers manage their own plans and payment methods, cuts support load meaningfully for self-serve SaaS.
Not right if: you are below roughly $30,000/month. Stripe Billing covers most needs without the platform fee until you outgrow it.
Visit ChargebeeBest for High-Volume Subscriptions: Recurly
Recurly. A subscription platform similar in scope to Chargebee, aimed at higher-volume media, online education and enterprise SaaS. It connects to Stripe, Braintree and other gateways and includes configurable dunning retry logic, a revenue-recovery module, proration and analytics.
Pricing is custom above entry tiers. It is typically evaluated alongside Chargebee for businesses at £500,000+ ARR that need robust multi-gateway support and analytics beyond Stripe Billing.
Not right if: you are an early-stage SaaS. The custom pricing and feature depth only pay back at higher volume; start on Stripe Billing.
Visit RecurlyBest for Consumer B2C Products: PayPal Subscriptions
PayPal Subscriptions. Lets customers pay with their PayPal wallet or a linked card on a recurring schedule. The conversion advantage is real for customers who prefer PayPal, particularly older and B2C audiences who may be likelier to complete checkout.
The fee (1.2% to 3.4% by volume) is higher than Stripe for many businesses, and PayPal’s dunning is limited next to Stripe Billing or Chargebee. It works best as a supplementary method alongside card billing.
Not right if: you want it as your sole subscription mechanism. The limited dunning and higher fee make it a second option, not a foundation.
Visit PayPalSubscriptions Payment Gateway Providers Reviewed
What to Look for in a Payment Gateway for Subscriptions
Recurring billing features
A subscription needs more than a repeat card charge. Look for trial management, proration when a customer changes plan mid-cycle, coupons, invoice generation, and revenue reporting that separates new MRR from churn and expansion. Stripe Billing includes all of this; PayPal Subscriptions is thinner.
Direct Debit versus card
The decision follows your customer profile and average revenue per user. Consumer subscriptions below £30/month suit card billing: it converts easily and processes instantly.
B2B subscriptions above £100/month suit GoCardless Direct Debit, where the £4 cap bites and customers are less likely to cancel impulsively.
Mixed models work too. Let B2B customers choose Direct Debit and consumers pay by card; Stripe and GoCardless can run in parallel on the same business.
Dunning and failed payments
UK consumer card failure rates of 5 to 15% are common before dunning. A well-configured sequence (retry at 3, 7 and 14 days with an automated update link) typically recovers 20 to 40% of failed charges. For any subscription above 50 active subscribers, dunning is worth implementing properly.
Tax across jurisdictions
If you sell across the EU and US, look for EU VAT OSS and US state sales-tax handling. Chargebee builds this in; Stripe offers it as the Stripe Tax add-on. Getting tax wrong on recurring revenue compounds quietly, so check this before you scale beyond your home market.
Payment Gateway Fees for Subscriptions
Platform fees versus transaction fees
Two different cost models sit on this page. Stripe Billing and GoCardless charge per transaction (0.5% on top of the card rate, or 1% + 20p capped at £4). Chargebee and Recurly charge a platform fee on top of whatever your underlying gateway costs.
The GoCardless cap
GoCardless caps its fee at £4 per collection. On a £1,000/month B2B contract that is £4 versus £15.25 on Stripe card billing. The higher your average revenue per user, the more the cap saves you, which is why it suits B2B over low-ARPU consumer plans.
When a platform fee pays back
Chargebee’s $249/month becomes worthwhile above roughly $30,000/month in subscription revenue, where the dunning, proration and tax handling save more than the fee costs. Below that, Stripe Billing covers most needs without the standing charge.
The hidden cost of churn
Failed payments are a cost, not just an inconvenience. At a 5 to 15% card failure rate, poor dunning quietly leaks recurring revenue every month. A platform that recovers 20 to 40% of failed charges often pays for itself before its headline fee is even in question.
Which Payment Gateway Is Best for Subscriptions?
For an early-stage SaaS under £30,000/month MRR, Stripe Billing is the default: it covers trials, proration, dunning and reporting with minimal setup and no platform fee.
For growing SaaS at £30,000 to £300,000/month, Chargebee on top of Stripe adds the dunning, proration and customer-portal depth Stripe Billing lacks. Recurly is the alternative at £500,000+ ARR needing multi-gateway support.
For high-value B2B with ARPU above £100/month, GoCardless Direct Debit is substantially cheaper than card billing and has lower failed-payment rates.
Many UK SaaS businesses run Stripe for low-ARPU consumer plans and GoCardless for B2B contracts at the same time. Add PayPal Subscriptions only as a supplementary consumer option.
Frequently Asked Questions
Which subscription gateway should I use for my SaaS?
It depends on your stage. If you run an early-stage SaaS under £30,000/month MRR, Stripe Billing covers most of what you need with minimal setup. As you grow to £30,000 to £300,000/month, Chargebee on top of Stripe adds the dunning, proration and customer-portal features Stripe Billing lacks. If your product is high-value B2B with ARPU above £100/month, GoCardless Direct Debit is substantially cheaper than card billing and fails less often. Many UK SaaS businesses run Stripe for low-ARPU consumer plans and GoCardless for B2B contracts at once.
What is dunning and why does it matter?
Dunning is the automated process of retrying failed card charges and prompting customers to update their payment details. UK consumer card failure rates of 5 to 15% are common before dunning. A well-configured sequence (retry at 3, 7 and 14 days with an automated card-update link) typically recovers 20 to 40% of initially failed charges, turning revenue churn into successful payments. If you run more than 50 active subscribers, you should configure dunning properly rather than leaving it on defaults. Stripe Billing includes Smart Retries; Chargebee and Recurly give you full workflow editors.
Can I offer PayPal for subscription payments?
Yes. PayPal Subscriptions lets your customers pay with their PayPal wallet or a linked card on a recurring schedule. The conversion advantage is that customers who prefer PayPal, particularly older and B2C audiences, may be likelier to complete your checkout. The fee (1.2% to 3.4% depending on volume) is higher than Stripe for many businesses, and PayPal’s dunning is limited compared with Stripe Billing or Chargebee. Offer it as a supplementary method alongside card billing, not as your sole subscription mechanism.
How we reviewed subscription payment gateways
Ranking criteria. We weighed each provider on recurring-billing capability (trials, proration, dunning, tax), all-in cost at different revenue levels, settlement and failed-payment handling. Capability-for-stage carries the most weight.
Data sources. Every fee, cap and feature was checked directly against provider pages (stripe.com/gb, gocardless.com, chargebee.com, recurly.com, paypal.com/uk) and the FCA Register in May 2026. Platform fees for Chargebee and Recurly sit on top of underlying gateway costs, which we state explicitly.
Disclosure. Some links on this page are affiliate links (GoCardless). This doesn’t affect our assessments: Stripe Billing leads on merit for most teams, and GoCardless is placed where it genuinely wins, on higher-value B2B Direct Debit. See our editorial policy.