Why SaaS Businesses Need a Backup Payment Gateway (and How to Choose One)

In the fast-moving world of SaaS, reliability isn't just a perk, it’s a prerequisite. That’s why more founders are now asking a critical question: What happens if your payment gateway suddenly fails, freezes funds, or suspends your account?

Reddit threads from the past year offer a sobering reality: even the most trusted platforms like Stripe and PayPal have let founders down without warning. And while the internet loves to argue over which gateway is “the best,” one takeaway stands above the noise: every SaaS business needs a backup gateway.

Let’s break down why and how to choose one.

The Case for a Backup Gateway

Reddit users shared multiple stories of:

• Account suspensions with little or no explanation (Stripe, PayPal).

• Unexpected fund holds during key growth periods.

• Slow or unresponsive customer support in critical moments (Paddle, Lemon Squeezy, Fastspring).

• Hidden fees or pricing surprises that hurt profitability (Lemon Squeezy, Fastspring).

These weren’t isolated complaints, they were recurring themes across Reddit’s top SaaS and founder communities. The pattern is clear: putting all your revenue in the hands of one gateway is risky.

A backup gateway acts as your insurance policy. It allows you to:

• Stay operational if your primary provider fails.

• Diversify payment options for international users.

• Experiment with better terms, support, or integrations.

• Reduce vulnerability during audits, migrations, or disputes.

Popular Backup Options (According to Reddit Founders)

Here are the platforms that came up repeatedly as strong secondary (or even alternative) gateways:

Paddle

• Best for: International SaaS with VAT compliance headaches.

• Pros: Merchant of Record (MoR), handles tax, invoices, billing support.

• Caution: Some found the API lacking.

Lemon Squeezy

• Best for: Founders looking for a simpler MoR with built-in features.

• Pros: Handles taxes, offers affiliate programs, easy setup.

• Caution: Higher fees than Paddle, USD focus, occasional bugs.

BillaBear

• Best for: Complex billing needs (usage-based, seat-based).

• Pros: Stripe Billing migration support, self-hosting option.

• Caution: Paid version is pricey, and UI lacks polish.

Chargebee

• Best for: Advanced billing automation.

• Pros: Free plan for small startups, intuitive subscription UI.

• Caution: Checkout customization is limited, tax tools require paid plans.

PayProGlobal

• Best for: SaaS with global ambitions needing fraud protection.

• Pros: Handles taxes globally, offers full MoR suite, strong support.

• Caution: Random ID verifications, delayed refunds reported.

How to Pick the Right Backup Gateway

From Reddit discussions, here are the criteria SaaS founders used when evaluating a secondary gateway:

Making the Right Choice for Your SaaS Business

After the analysis, it's clear that there's no one-size-fits-all solution. Your ideal payment gateway depends on factors specific to your business:

Global Reach: If you sell internationally, MoR solutions like Paddle, Lemon Squeezy, or PayProGlobal can eliminate tax compliance headaches.

Billing Complexity: For complex subscription models, Chargebee or BillaBear offer robust solutions out of the box.

Developer Resources: Limited tech team? Lemon Squeezy and Mollie are praised for their simplicity.

Budget Constraints: Early-stage? Consider Chargebee's free tier or BillaBear's self-hosted option.

Growth Stage: Enterprise-level businesses might benefit from Stripe's comprehensive ecosystem despite higher costs.

Final Word: It’s Not About Ditching Your Primary Gateway

This isn’t a call to abandon Stripe or your current setup.

It’s about hedging risk, ensuring continuity, and unlocking new capabilities. The Reddit consensus is simple: even the best systems fail, and when they do, it pays to be prepared.

So, whether you’re running a small bootstrapped SaaS or scaling toward enterprise, make 2025 the year you stop flying solo with just one payment processor.

PS: This analysis is a subset of a broader Reddit-based research report on payment gateways. You can read the full breakdown here.