How to Choose a Billing Platform: A Buyer's Framework for 2026

Choosing a billing platform is one of the highest-leverage infrastructure decisions a SaaS company makes. It determines how fast you can iterate on pricing, how much engineering time you spend on maintenance, and whether you can scale from self-serve to enterprise without rebuilding from scratch.

Yet most companies approach billing selection reactively — either building in-house when they should buy, or locking into a vendor that can't grow with them. According to OpenView's 2025 SaaS Benchmarks, 98% of SaaS companies modify their pricing at least once per year, but 55% report they can't efficiently accommodate those changes with their current billing stack. That gap between pricing ambition and billing capability is where revenue gets left on the table.

This framework gives you a structured approach to evaluating billing platforms in 2026 — whether you're replacing an in-house system, migrating from a legacy vendor, or choosing your first billing infrastructure.

Should you build or buy a billing platform?

Most SaaS companies should buy a billing platform rather than build in-house. Gartner's 2025 analysis found that 78% of SaaS companies with more than $50M ARR use commercial billing platforms[2], because building billing consumes 8 to 14 engineers for 3 to 4 months minimum — and those engineers then spend 40% of their time on maintenance rather than product features.

Before evaluating vendors, you need to answer a fundamental question: should you build billing in-house or buy a platform?

The appeal of building is control. You design the data model, own the logic, and avoid vendor fees. But the reality is that billing is deceptively complex. What starts as a simple Stripe integration becomes a sprawling system of metering pipelines, invoice generation, tax calculation, payment reconciliation, dunning logic, and revenue recognition — all of which need to stay in sync, handle edge cases, and comply with financial regulations.

Gartner's 2025 analysis found that 78% of SaaS companies with more than $50M ARR use commercial billing platforms rather than in-house systems[2]. The reason is straightforward: building billing consumes 8 to 14 engineers for a minimum of 3 to 4 months just to reach basic functionality, and those engineers then spend roughly 40% of their time debugging and maintaining the system rather than building product features.

When building makes sense

Building in-house is defensible in a narrow set of circumstances: when billing IS your product (you're a fintech or payments company), when you have genuinely unique billing logic that no platform supports, or when regulatory requirements mandate complete control over every line of code. Even in these cases, most companies end up building on top of an open-source billing core rather than starting from zero.

When buying makes sense

For the vast majority of SaaS companies, buying a billing platform is the right choice. The question then shifts from "build or buy" to "which platform fits our trajectory." SquadStack, for example, saved 80 engineering hours per quarter after migrating from an in-house system to a third-party billing platform — time that went directly back into product development.

The economics favor buying even more strongly when you factor in ongoing costs. Stripe's internal analysis showed that companies using a dedicated pricing catalog reduced pricing-related engineering tasks by 67%[3]. When your billing platform handles the complexity, pricing changes become configuration updates instead of engineering sprints.

The five dimensions of billing platform evaluation

Once you've decided to buy, the evaluation process should cover five core dimensions. Each one can be a dealbreaker depending on your stage, pricing model, and growth trajectory.

1. Pricing model flexibility

This is the single most important evaluation criterion. Your billing platform must support the pricing models you use today AND the ones you'll need in 12 to 18 months. According to Maxio's 2025 SaaS Growth Report, companies using hybrid pricing models (subscription plus usage) achieved a 21% median growth rate, compared to 10% for pure subscription companies[4].

Evaluate whether the platform supports usage-based pricing with real-time metering, not just batch calculations. Check if it handles hybrid models where subscription fees and usage charges coexist on the same invoice with correct proration. Verify it can manage credits-based systems with wallet functionality, automatic top-ups, and expiration rules. And confirm it offers graduated, volume, percentage, and package pricing — all configurable without code changes.

The critical test: can your product team launch a new pricing tier in hours, or does it require an engineering sprint? If the answer is the latter, the platform will become a bottleneck as you scale.

2. Metering and event processing

If you're doing any form of usage-based or consumption pricing — and 85% of SaaS companies now are, according to OpenView[5] — your billing platform's metering capabilities are non-negotiable.

Real-time event ingestion is the baseline. Your system needs to process usage events as they happen, not in nightly batches. This matters for three reasons: enforcing free-tier limits in product-led growth requires knowing current usage instantly, customers expect real-time usage dashboards, and progressive billing (invoicing at usage thresholds) requires continuous tracking.

Beyond raw ingestion speed, evaluate the aggregation capabilities. Can the platform handle multiple aggregation types — count, sum, unique count, weighted sum, maximum — across different metrics simultaneously? Can it filter events by properties (region, provider, feature tier) to support multi-dimensional pricing? These capabilities determine whether you can implement sophisticated pricing or are limited to simple per-unit charges.

3. Payment infrastructure

Payment processing flexibility is often overlooked during billing evaluation, but it becomes critical as you scale internationally. The key question is whether the platform locks you into a single payment processor or supports multiple gateways.

Payment processor lock-in is one of the most expensive forms of vendor dependency. Different regions, customer segments, and transaction types may require different processors. A European enterprise customer might prefer SEPA Direct Debit through GoCardless, while a US startup pays by card through Stripe, and an Asian customer needs a local payment method through Adyen. If your billing platform only works with one processor, you're leaving revenue on the table or building custom integrations around it. This is especially critical for fintech billing where regulatory requirements mandate specific payment rails per jurisdiction.

Also evaluate the platform's payment automation: automatic collection on invoice finalization, retry logic for failed payments, dunning workflows, and payment reconciliation. These operational capabilities directly impact your collection rate and involuntary churn.

4. Enterprise readiness

Even if you're early-stage today, evaluate billing platforms for enterprise capabilities you'll need within two years. Enterprise billing requirements include minimum commitments with true-up calculations, custom plan overrides for negotiated pricing without creating one-off plans, multi-entity billing for organizations with multiple subsidiaries or geographies, and prepaid credit wallets with volume discounts and configurable top-up methods.

The cost of choosing a platform that can't handle enterprise billing is not the platform fee — it's the 6 to 12 month migration project when you outgrow it. Migration costs typically run 50 to 100% of annual software spend when you factor in engineering time, data migration, testing, and the revenue risk during cutover.

5. Integration architecture

Billing doesn't exist in isolation. It feeds data to accounting systems, CRM platforms, data warehouses, and tax engines. Your billing platform's integration architecture determines whether these connections are native, API-driven, or manual.

Prioritize platforms with API-first design — where every capability available in the UI is also available programmatically. This matters because billing in a product-led company is a product function, not a back-office tool. Your engineering team needs to embed billing into the product experience: surfacing usage data in-app, triggering upgrade prompts based on consumption, and enabling self-serve plan management.

Also evaluate the webhook system. Event-driven architectures depend on reliable, well-documented webhooks for invoice events, payment status changes, subscription lifecycle updates, and usage threshold alerts. Missing or unreliable webhooks create data gaps that compound over time.

Vendor lock-in: the hidden cost of billing platforms

Vendor lock-in is the most underappreciated risk in billing platform selection. SaaS vendors know that switching costs are real — most companies will absorb 10 to 15% annual price increases rather than face the pain of migrating their billing infrastructure. This dynamic creates a compounding cost that can reach 20 to 30% effective increases when you include migration surcharges, credit multiplier changes, and forced feature bundles.

Lock-in manifests in three forms. Technical lock-in occurs when your billing platform uses proprietary data formats, non-standard APIs, or custom integrations that make migration expensive. Financial lock-in happens through multi-year contracts, upfront payments, and auto-renewal clauses that penalize switching. And operational lock-in develops when your team's processes and workflows become dependent on platform-specific features that don't exist elsewhere.

How to evaluate lock-in risk

During evaluation, ask these questions: can you export all billing data (invoices, subscriptions, usage events, customer records) in standard formats at any time? Does the platform use open APIs and standard data models, or proprietary schemas? Are your payment processor integrations owned by you or mediated by the billing platform? And what happens to your historical data if you leave?

Contract terms matter as much as technology. Negotiate for data portability clauses, reasonable termination terms, and pricing guarantees. A billing platform that offers month-to-month pricing signals confidence in their product; one that requires multi-year commitments may be compensating for high churn.

Open source vs. proprietary: a strategic choice

The billing platform landscape has shifted significantly with the maturation of open-source alternatives. This isn't just about cost savings — it's a fundamentally different approach to billing infrastructure ownership.

Open-source billing platforms offer four structural advantages. First, transparency: you can inspect, audit, and understand exactly how your billing engine works. There's no black box calculating your invoices. Second, deployment flexibility: self-host on your own infrastructure for full data control, or use a managed cloud version for convenience. Third, no vendor lock-in: you own the code, the data, and the deployment. If the vendor disappears or raises prices, you can fork and maintain the platform independently. Fourth, community-driven development: features and integrations are contributed by a global developer community, reducing dependency on a single vendor's roadmap.

Proprietary platforms counter with faster initial setup, dedicated support, and less technical overhead for non-engineering teams. The trade-off is reduced control and increased dependency.

For companies in regulated industries, fintech, or any sector with strict data sovereignty requirements, the ability to self-host billing infrastructure is increasingly non-negotiable. Open-source platforms like Lago address this directly — offering the deployment flexibility of an in-house build with the feature completeness of a commercial platform, supporting eight charge models, real-time event ingestion at over 1M events per second, and native integrations with multiple payment processors including Stripe, Adyen, and GoCardless.

Evaluation scorecard: what to weight by stage

Not every dimension matters equally at every stage. Here's how to weight your evaluation based on company maturity:

Early stage (pre-$1M ARR): Prioritize pricing model flexibility and time-to-integration above all else. You need a platform that lets you experiment with pricing without engineering bottlenecks. Enterprise features and multi-entity billing can wait. Weight: 40% pricing flexibility, 30% integration speed, 20% metering, 10% enterprise readiness.

Growth stage ($1M–$20M ARR): Metering accuracy and payment infrastructure become critical as usage-based revenue scales. Self-serve customer portals and automated dunning directly impact net dollar retention. Start evaluating enterprise capabilities for your first large contracts. Weight: 30% metering, 25% pricing flexibility, 25% payment infrastructure, 20% enterprise readiness.

Scale stage ($20M+ ARR): Enterprise readiness and lock-in risk dominate. You need multi-entity billing, custom commitments, and prepaid credit systems. Integration architecture matters because billing data feeds a dozen downstream systems. And vendor lock-in risk is now a board-level concern. Weight: 30% enterprise readiness, 25% lock-in risk, 25% integration architecture, 20% metering.

The total cost of ownership calculation

Platform fees are the most visible cost but rarely the largest. A complete TCO calculation includes the platform subscription or usage fees, implementation costs (engineering time for integration, data migration, and testing), ongoing maintenance (API updates, feature configuration, troubleshooting), opportunity cost of engineering time spent on billing instead of product, and revenue impact from billing limitations (slow pricing changes, inaccurate metering, payment failures).

For context, Chargebee's 2025 State of Subscriptions Report found that 43% of companies now combine subscriptions with usage-based components, with adoption projected to reach 61% by year-end[6]. If your billing platform can't support hybrid pricing without custom engineering, you're paying for that limitation in lost growth opportunities — even if the platform fee is low.

The most expensive billing platform is the one you outgrow in 18 months. Factor migration costs into your TCO: 50 to 100% of annual software spend, plus 3 to 6 months of engineering time, plus the revenue risk of running parallel systems during cutover.

Conclusion

Billing platform selection is not a procurement decision — it's an infrastructure bet on how your company will monetize for the next 3 to 5 years. The framework is straightforward: start with the build vs. buy decision, evaluate across five dimensions weighted for your stage, quantify lock-in risk and total cost of ownership, and choose a platform that supports your pricing ambitions today without constraining them tomorrow.

The companies that get this right treat billing as a growth lever. The ones that don't spend the next two years working around their billing platform's limitations — or worse, migrating to a new one.

Citations

[1] OpenView, State of Usage-Based Pricing

[2] Gartner, SaaS Billing Platforms Analysis 2025

[3] Stripe, Billing Platform Pricing Catalog Analysis

[4] Maxio, 2025 SaaS Growth Report

[5] OpenView, State of Usage-Based Pricing

[6] Chargebee, 2025 State of Subscriptions Report