Lago, best Recurly alternative for usage-based Billing

What is Recurly?

Recurly is a subscription management and recurring billing platform that helps businesses of all sizes create, manage, and grow their subscription businesses. It is a cloud-based solution that offers a wide range of features, including subscription management, recurring billing, payments, reporting and analytics.

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What is Lago?

Lago is an open-source metering and usage-based billing solution. It offers a self-hosted and cloud-based, scalable, and modular architecture to manage subscriptions, usage based billing and all the nuances in between. It's the go-to choice for companies that require a powerful tool to handle complex billing logics, allowing you to build a comprehensive billing system from scratch with ease.

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How is Lago different from Recurly?

1. Feature comparison

Usage-based Pricing 

Recurly supports straightforward pricing models such as Subscription and Standard usage-based pricing (e.g. $20 per user). However, it may not be flexible enough for businesses that need support for complex usage-based pricing models. 

Lago is designed for usage-based pricing models, providing a high level of flexibility. This allows businesses to implement and tailor pricing models that accurately reflect your unique strategies and revenue structures, especially when dealing with intricate billing scenarios.

​​For example, both softwares can handle standard subscription pricing like Netflix and basic usage-based pricing like Twilio's per-message rates. However, for complex models like PayPal's per-transaction pricing with a percentage and fixed fee, plus minimum and maximum limits, Recurly faces limitations, whereas Lago offers flexibility to configure these models.

Aggregation & Metering

Aggregation types in billing are the methods used to meter usage.

Recurly provides two basic aggregation types, namely Cumulative (Sum) and Last Recorded for its usage-based add-ons. However, it may not cover all usage-based billing scenarios and may require customers to perform additional data aggregation and metering before sending data to Recurly.

Lago is a usage-based billing engine by default. It supports a wide range of aggregation types, allowing for any type of usage-based billing.

Number of decimals

Recurly offers support for up to 9 decimal places in usage-based pricing.

Lago supports up to 15 decimal places in usage-based pricing. This can be more granular for specific charges such as GB per second. For instance, AWS Lambda pricing requires 10 decimals for a unit charge. 

Invoicing operations

Recurly allows businesses to create and customize multiple invoice templates for various needs. However, it does not support custom fields in invoices.

Lago offers advanced invoicing features including customer metadata and grace period. These features can enhance invoicing operations and compliance.

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2. Is Lago cheaper than Recurly?

Recurly's Core Plan begins with a monthly platform fee of $249 and includes a 0.9% fee based on revenue. In 2023, they have a promotional offer for this plan; details here. For Professional and Elite Plans, Recurly offers custom pricing.

Lago offers a forever-free Open Source solution for small businesses, allowing access to fundamental billing features. Besides, Lago provides Startup and Enterprise Plans with access to premium features listed here.

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3. Transparency matters

Transparency is one of the 8 things to consider when choosing your billing system.  When choosing a third-party billing solution, it's essential to ensure your team understands its architecture. This knowledge is invaluable, especially for tricky scenarios. You want to avoid being in the dark when trying to resolve critical issues.

If you opt for a closed-source solution like Recurly, push for transparency and try to understand how it works.

Lago, being an Open Source, offers complete transparency, allowing engineers to audit its code and even build on top of it. And the best part is, it’s always free and accessible. So, Lago serves as a fall back option without vendor lock-in concerns. What’s the fallback option for a tool like Recurly? The pertinent question arises: what if Recurly discontinues its product or enforces a significant price hike?

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TL;DR: Table of comparison Lago vs. Recurly

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Is Lago an Open Source alternative for Recurly?

Yes! Lago is an open-source and open-core Recurly alternative. Lago’s GitHub repository is open to everyone, running under an AGPL v3 license.

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Does Lago provide a user interface similar to Recurly's?

Yes! In addition to being API-first, Lago provides a user-friendly interface that can be used by non-technical people.