Choosing the right FastSpring alternative

Fastspring positions itself as a platform for both ecommerce and SaaS businesses.

For ecommerce, FastSpring offers additional functionality to support shopping carts and the sale of physical goods.

More recently, FastSpring has expanded its focus to serving businesses selling digital goods, such as downloadable content. This is currently more suited for businesses selling on a one-time rather than a subscription basis. 

FastSpring’s service as a merchant of record means that it can be used by SaaS companies looking for a way to manage payments and subscriptions. Managing sales tax compliance is also core to the merchant of record model, which is of particular use for SaaS companies who operate internationally or domestically in regions like the US where sales tax legislation is particularly complex. 

Some of its additional functionality, though, like shipping calculators, aren’t going to be of much use. 

As mentioned, FastSpring recently started to build out its capabilities for servicing businesses that sell digital goods and services. Part of this included the acquisition of quoting tool SalesRight, which now powers FastSpring’s invoicing tool for SaaS. FastSpring has also developed some capabilities that enable recurring payments and billing. 

Even with these developments, FastSpring doesn’t specialize in SaaS, so you’ll still have work to do to build a revenue delivery infrastructure optimized for the SaaS model, including:

• Flexible subscription models and recurring billing
• Simple localization processes including local languages and currencies
• Efficient customer support and growth advisory services to help you execute SaaS strategies
• Unified data, reporting and analytics that enables you to respond to new market opportunities, quickly. 

At Paddle, we speak with 20-30 SaaS businesses each month who are looking for an alternative to FastSpring. In these conversations, we discuss all aspects of revenue delivery to understand why they’re looking for something different. 

Of those sellers, we help the ones that choose Paddle to securely migrate their live subscriptions from FastSpring, which shows us first-hand how it performs for software sellers across different industries. 

Here are the top five reasons why we see businesses looking for an alternative: 

1. Limited, low converting checkout experience

While FastSpring offers a range of local payment methods that can boost conversion in different markets, its checkout solution only offers basic branding and customization (logo and a few core colors), which can lead to friction in your purchase flow. 

Some sellers also report issues with “false positive” fraud triggers – when legitimate customer payments fail because they’re incorrectly marked as fraudulent and blocked by automated fraud tooling. This is likely caused by FastSpring’s approach to managing chargebacks, but more on that later. 

2. Inflexible subscriptions

FastSpring’s split focus between ecommerce and SaaS sellers means that its subscription management solution doesn’t offer the same level of flexibility as others, built specifically for SaaS execution. 

To combat this, FastSpring sellers have to set up APIs that enable them to customize subscription plans and manage recurring payments. While this definitely adds to their offering, a lack of documentation means more engineering time is spent on revenue delivery and away from developing your product.

When you manage subscriptions through FastSpring, your customer accounts are created directly with them – which in turn means that your customers can cancel through FastSpring as well. This creates a disjointed experience for your customers and reduces your ability to track, report, and prevent churn. 

This approach to subscriptions also makes moving away from FastSpring difficult. In fact, FastSpring has even been known to delay or refuse to assist with the subscription migration process (a barrier Paddle is well-versed in helping former FastSpring sellers overcome). The impact of this forces your customers to re-subscribe, risking high levels of churn and ultimately revenue loss.

3. Slow customer support

Sellers moving away from FastSpring have shared that product updates to the platform often bring breaking changes to seller implementations, which disrupts the customer experience and loses revenue. FastSpring migrants also share that there isn’t proactive support or safeguards against downtime on offer.

FastSpring support is also limited to implementation and answering support tickets, where some others offer advisory or partnership services on SaaS strategy and best practices.

On top of that, unlike other providers on the market, FastSpring doesn’t fight chargebacks on behalf of its sellers. They instead focus on functionality that prevents chargebacks from happening in the first place. 

The problem with this approach is that it doesn’t help you if one slips through the net. In fact, you risk losing revenue from chargebacks. 

The focus on chargeback prevention also links to the high rate of ‘false positives’ highlighted above – where in an effort to prevent chargebacks, some legitimate transactions are falsely flagged as fraudulent. 

4. Limited support for B2B SaaS strategies

Founded in 2005 FastSpring, understandably, wasn’t made with the emergence of B2B SaaS companies in mind. It also continues to support a wide range of businesses, outside of the SaaS space. 

As such, FastSpring’s support for the sale of digital goods is more suited to one-time purchases rather than complex B2B subscription models. This means that, for SaaS sellers, there is still more work to do to establish your own best practices and optimize processes to support SaaS strategies. 

5. Higher cost than alternative solutions

FastSpring typically charges 5.9% + $0.95 per transaction (orders under $25 are charged at 8.9% with a minimum fee of $0.75).

But this isn’t the full story – and the cost quickly adds up, particularly for those selling internationally. 

Businesses who wish to receive their payouts in a currency other than USD will incur a 2.5% currency conversion charge. 

On top of that, if there is currency conversion involved in your customer transactions, there can be additional charges of between 3.5 and 5.5% depending on the currencies being used. To give an example, this means that a $30 NZD transaction with FastSpring would pay out only $25.

Differences in charges by currency and transaction type also make it hard for your Finance team or accountant to record and reconcile payments and charges. 

So, we know why businesses look for an alternative to FastSpring but how do the alternatives on the market compare and which one is right for your business?

A revenue delivery platform builds on the merchant of record model to deliver a broader, and more optimized set of services. In short, a revenue delivery platform gives businesses: 

• All of the benefits of the merchant of record model (including sales tax compliance, managed payments and subscription billing)
• Plus the resources, support and functionality to actually improve these revenue delivery processes across the entire customer lifecycle. 

Let’s take a look at what that means in practice, with Paddle 😇

Paddle

Paddle is a revenue delivery platform that, unlike FastSpring (and some other merchants of record), was built for modern SaaS execution. We work exclusively with software and SaaS companies to provide the revenue delivery infrastructure needed for growth. 

Sellers running their business through Paddle benefit from: 

• Paddle Subscribe for creating a flexible subscription experience for your customers. 
• Paddle Managed Payments which provides instant access to an international banking infrastructure where payments are optimized locally and routed accordingly for the best chance of success. 
• Managed Support so your team can focus on high level work and upsell opportunities, rather than answering payment and subscription queries. 

Running alongside all of this is Paddle Comply, which allows our sellers to operate with full integrity (wherever your customers are based), without the headache of managing SaaS sales tax internally. No registering, no filing, no audits. Nada sales tax woes for you.

When it comes to support, Paddle has a dedicated team of SaaS specialists on hand, as well as revenue delivery advisory for larger sellers.

Other merchants of record make for more of a “like for like” comparison with FastSpring. Just like Fastspring, they tend to be systems built originally to support ecommerce businesses, yet many have also made a more recent move to SaaS.

As such, you’ll face some of the same challenges with these providers as you would with FastSpring. 

One of those challenges (and one not to underestimate the impact of) is customer support. Before choosing an alternative, you’ll need to factor in the level of support you’ll need from an MoR as you scale. 

As with any competitive landscape, there is some variation when it comes to core product offerings, price and payment support. So, let’s take a look.

1. 2Checkout

2Checkout’s merchant of record solution is called 2Monetize. Key features include: 

• Managing sales tax, payments, support and subscriptions as an MoR
• An auto-card updater service that can help reduce churn, available as an add on
• Retry logic, to boost payment acceptance, available as an add-on 

2Checkout also has separate products for sellers who only wish to use it for certain aspects of their revenue delivery: 

• 2Sell: A payment processor which allows businesses to process online payments via card and PayPal. It also has shopping cart functionality. 
• 2Subscribe: A payment processor more specifically for subscription businesses with recurring billing and payment requirements 

It’s important to note though that anyone using these would need to build solutions in-house or integrate with additional tools to manage other elements of revenue delivery like sales tax compliance.

Another thing to note is that in April 2021, 2Checkout was forced to stop processing MasterCard payments in some regions. As it’s likely some of your customers will be paying through MasterCard (at Paddle, 37% of global credit card payments are run through MasterCard), you’ll need to check whether or not this option is still available everywhere your customers are based.

In short: 2Checkout serves a broad range of businesses and as such offers integrations to plug in additional functionality, like shopping carts. But if you’re looking to support online card payments, you’ll need to make sure MasterCard processing is still available via FastSpring in the locations your customers are based.

2. Digital River

Digital River is a so-called “headless commerce” merchant of record service. What this means is that some of their newer product offerings are designed to enable its customers to customize billing and purchase flows more effectively. In practice though, this can mean a heavy workload to manage a more complex integration. 

Key features: 

• Managing sales tax, payments, support and subscriptions as an MoR.
• Headless commerce functionality
• Volume discounting

As with other merchants of record, DigitalRiver has made updates to its products to support SaaS and subscription business, rather than being built with these business models in mind. So, while it can serve these businesses, it doesn’t offer the level of flexibility when it comes to subscriptions and recurring billing that you might be looking for as a growing SaaS business.

In short: Digital River is a better fit for B2C businesses than B2B as it currently lacks support for more complex SaaS billing models. SaaS businesses using DigitalRiver should be aware that they might have to integrate additional tooling for SaaS-specific reporting. 

3. Cleverbridge

Cleverbridge is slightly different to the other merchants of record we’ve discussed in that it can support a more flexible range of subscription models. 

Key features: 

• Managing sales tax, payments, support and subscriptions as an MoR
• Configurable pricing layouts
• Shopping cart customization

Cleverbridge’s more flexible offering definitely sets it apart in some ways but any customization does require more work on your end to maintain and manually make any adjustments to these workflows.

In short: The ability to integrate more billing models and customize your pricing page sets CleverBridge apart from other merchants of record. It’s best used by businesses who have the resources in-house to manage the initial setup and ongoing maintenance of what is a more complex integration. 

4. PayPro Global

PayPro Global is a merchant of record for businesses selling digital products. 

Key features: 

• Managing sales tax, payments, support, and subscriptions as an MoR
• Checkout customization
• The ability to run and test upsell campaigns

PayPro Global has a range of payment options on offer and provides payment routing which can give transactions a better chance of success. That being said, it does work with businesses in some industries that are deemed high-risk by other providers and banks. This can impact payment performance and acceptance rates - even if your business doesn’t fall into the high-risk category. 

PayPro Global also tops the charts as the most expensive of the providers we’ve talked about, charging a $1 fee in addition to its 4.9% charge per transaction. 

In short: PayPro Global is better suited for businesses selling B2C due to its relatively basic subscription models. B2B businesses would need to make significant advancements to PayPro’s subscription billing models – costing more on top of its already high fees.