Stripe’s limitations for usage-based billing

Alvaro Morales

A common question we get is what is Orb vs. Stripe? In short, Orb replaces Stripe Billing, and integrates with Stripe Invoicing & Payments.

Orb is state-of-the-art infrastructure purpose-built for usage-based billing. Our billing engine powerfully and flexibly transforms usage data into accurate invoices for companies with modern pricing. Orb replaces Stripe Billing for good reason: we don’t believe Stripe was built for usage-based billing, and thus falls short in significant ways.

Stripe was born into the era of seat-based subscription pricing in the early 2010s and is a best-in-class solution for payments. From payments, Stripe expanded to offer adjacent products like billing services to support the explosion of companies built on per-seat models in the last decade.

Modern pricing in 2024 is evolving away from seat-based subscriptions towards hybrid and usage-based pricing, especially companies with AI offerings. Today’s market pressures call for teams to ditch legacy tools like Stripe Billing in favor of a proven tool designed for today’s needs. Using Stripe to solve usage-based billing is like having a rigid tool for a business-critical job that requires speed, flexibility, and accuracy. 

Why? Stripe falls short at the foundational level because it is built on a metered billing model. This creates consequential gaps in usage tracking, the bedrock for usage-based billing. Here’s what we’ve learned from our customers about the most common failures in attempting to shoehorn Stripe for usage tracking.

Stripe lacks scale in data volume ingestion

Usage tracking requires the ability to ingest event data at scale. These usage events are the building blocks for determining accurate billing, invoicing, and reporting. Stripe’s current rate limit for event ingestion is around 100 requests per second across all API endpoints. This is like trying to put out a fire with the trickle of your garden hose, when you really need a full-force firehose. 

As a product designed for the era of seat-based subscription models, Stripe simply didn’t need the data architecture to support high event volume. All it needed to count was the number of seats per account. When you’re dealing with usage tracking, the last thing infrastructure engineers want to hit are limits on data volume and request throughput because it requires them to build their own data pipelines outside of Stripe – adding just another failure point to monitor and maintain. 

So, consider Orb. Designed as a data infrastructure product from the get-go, Orb handles events at scale at volumes like 250,000 events per second, or more–individual deployments with Orb can reach over one million events per second.

Price changes in Stripe require re-integration

Stripe’s metered billing model tightly couples how you track billable usage with how you price for it today, making it harder to evolve pricing over time. As such, Stripe acts like a ticket counter, counting for only specific attributes that teams must pre-define for billable events.

At setup, a company might define a billable event generally as “GB used.” But soon, they might realize that it’s more profitable to charge based on “GB used per region” where data is being geographically accessed. To alter this definition in Stripe and update the overall pricing model, engineers ultimately have to re-implement their Stripe integration, costing time and engineering resources. 

On the other hand, Orb is built to take in all dimensions of your data–letting you use SQL to define your metrics at any time without reintegration. This gives companies the utmost flexibility to evolve with the market. 

Blurred visibility with Stripe

In usage-based billing models, companies and their customers want visibility into consumption. Ideally visibility comes through turnkey user-friendly dashboards and alerting functions. Stripe doesn’t offer either function, nor does it offer real-time access. Instead, companies are dependent on Stripe’s periodic summaries via the API. 

This means companies can’t react instantly in notifying customers as they approach specific usage and cost thresholds, nor can teams like sales and customer success swiftly upsell customers when their prepaid usage consistently goes over spend. 

Contrary to Stripe, Orb has real-time alerting and our usage APIs give you visibility down to the second. Customers love this feature for building customer trust and preventing fraud

Stripe is fundamentally built for seat-based billing, not usage-based billing

Ultimately, Stripe’s billing product was built for seat-based subscription models. And the reality is that today’s modern companies incorporating usage-based pricing have a set of requirements that were not conceived of when Stripe was first designed. Any increase in rate limits or adjustments to integration paths in Stripe are likely to be short-term fixes–not fundamental design overhauls that consider the intensive usage tracking nature of this new pricing model. 

At Orb, we believe our tools must keep up with our decisions around go-to-market and pricing evolution—not the other way around. Legacy tools like Stripe Billing shouldn’t dictate and constrain opportunities that make companies more agile and competitive.

We discovered even more transparent watchouts for using Stripe for usage-based billing. Get the full review here:

April 2, 2024

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