Search code examples
ruby-on-railsrubyweb-applicationspaymentrecurring-billing

Recurring billing with Rails and ActiveMerchant: Best practices, pitfalls, gotchas?

We are prepping for the release of a large web application that has been in development for the past year. We are about to start the process of integrating ActiveMerchant to handle recurring subscription fees for the service.

I am looking for any advice regarding best practices considering our requirements (listed below) and any additional heads-up for common pitfalls or specific issues I should be giving special consideration. The payment gateway we will be using is PaymentExpress as it's one of the few supported gateways that has recurring billing and doesn't have any special conditions for companies operating outside of the USA. The business behind this application is based out of the UK.

Users of the application create an account with a sub-domain where they can access and customise the application and their data. Below are some of the requirements/features that might have an effect on how billing works:

  • All users get a 30 day trial
  • There are different plans, including a free one
  • Higher priced plans have larger limits on the amount of data (e.g. users, projects, etc) they can have in their account
  • Billing period will be monthly, beginning after trial
  • There will be discounts/coupon codes to get a percentage off the normal price for a year on plans, etc.
  • Plan pricing will change as features are added

Specific hurdles I can foresee will be things including the following:

  • How to handle downgrading when they violate the plan limits for lower level plans.
  • Behaviour when credit cards expire or payments don't go through (a read-only mode enforced, perhaps)
  • When plan pricing changes, we want to honour previous prices for existing users for a time period (such as 6 months), then start charging higher rates. If the plan price decreases, it will take effect immediately.

Other advice that would be helpful would be anything regarding flow of the application. How should billing forms be presented to the user? When should credit card information be required? How should invoices be sent, stored, and accessible?

I should disclose that we plan to base a lot of the code base off SaaSy. SaaSy is designed to be used as a separate Rails app that handles all the signup and account management side of things. However, this doesn't work for us since we never planned for this from the beginning and it would be a tedious process to adapt our application to work like that. Consequently, we'll be pulling code and ideas from SaaSy and merging them into our app, a considerably less tedious task.

Solution

  • RailsKits has a Software as a Service kit that should do what you need. It has built-in support for free trials, upgrading, downgrading, plan limits, etc., and it supports PaymentExpress (and some others).

    I've researched it a bit for a project I'm doing, but I haven't purchased it yet so I can't vouch for it. However, I have seen a few blog posts praising this kit.

    While the RailsKit is relatively inexpensive when compared what it would cost you to implement all of its features yourself, there are a couple open source versions out there that aim to accomplish the same thing. The one I remember off the top of my head is called Freemium.

    EDIT: I forgot to mention that Ryan Bates said in his most recent Railscast that his next episode or two will deal with recurring billing, so keep an eye out for that. He usually does one episode per week, and the five he's done since December 22 all cover handling payments of different types.