---
source_url: "https://developer.paddle.com/get-started/how-paddle-works/saas/?utm_source=openai"
title: "Paddle for SaaS | Paddle Developer Docs"
mirrored_at: 2026-08-12T03:33:51.492Z
host: developer.paddle.com
cited_in_42a: true
mirror_canonical: "https://index.42a.ai/developer.paddle.com/get-started/how-paddle-works/saas/index__q__utm_source_openai"
---

> **Original source:** https://developer.paddle.com/get-started/how-paddle-works/saas/?utm_source=openai

Paddle is a [merchant of record](https://mor.paddle.com/) platform built for modern SaaS businesses. It manages your payments, taxes, and subscriptions in a single integration, so your team can ship features faster.

Companies like [CrashPlan](https://www.paddle.com/customers/crashplan-doubled-sign-ups-with-paddle), [Plausibe Analytics](https://www.paddle.com/customers/how-plausible-analytics-used-paddle-to-achieve-200-mrr), [n8n](https://www.paddle.com/customers/how-paddle-helped-n8n-io-grow-mrr), [Relay.app](https://www.paddle.com/customers/relayapp-live-in-weeks-sells-globally-without-barriers), and [TeamGantt](https://www.paddle.com/customers/team-gantt-boosts-conversions-retention-with-paddle) use Paddle to power their business.

## Key features for SaaS businesses

## Pricing models you can build

In Paddle, [products and prices](https://developer.paddle.com/build/products/create-products-prices) are flexible entities you compose into the structure you need. Products describe what you sell, and related prices describe how you sell a product.

This means you can build any pricing structure you need, from flat, good-better-best, per-seat, usage-based, and feature based pricing.

-   **Recurring plans** with any billing period, optional [trials](https://developer.paddle.com/concepts/subscriptions/trials), and multiple items on a subscription.
-   **Good-better-best**, like Starter, Pro, Enterprise, by creating one product per tier.
-   **Per-seat billing** by [adding seats as a quantity](https://developer.paddle.com/build/subscriptions/add-remove-products-prices-addons) on a price item.
-   **Add-ons** on top of a base plan, billed on the same cycle or a different one.
-   **Usage-based charges** for metered features, billed via custom items on the next invoice.
-   **Plan changes** with [proration](https://developer.paddle.com/concepts/subscriptions/proration) calculated to the minute, and your choice of whether to bill now, on the next renewal, or skip billing.
-   **One-time charges** alongside subscriptions for things like activation fees, overage, or single purchases.

If you manage your catalog outside of Paddle, you can add non-catalog items to a transaction or subscription, too.

## Transactions and subscriptions

[Transactions](https://developer.paddle.com/api-reference/transactions) and [subscriptions](https://developer.paddle.com/api-reference/subscriptions) are the core billing entities in Paddle:

-   When a transaction (checkout or invoice) is completed, Paddle creates a related subscription.
-   When a subscription renews, Paddle creates a new transaction to collect payment for it.
-   Upgrades, one-time charges, and other changes to a subscription create transactions, too.

The entire subscription lifecycle can be understood in terms of these two entities, meaning it's easy to determine the state of a subscription at any given time.

## The subscription lifecycle

The subscription billing engine in Paddle handles the complete subscription lifecycle, including signup, renewal, upgrade and downgrade, pause, and cancellation.

flowchart LR
    S\[sign up\] --> A\[trialing\]
    A --> B\[active\]
    B <--> C\[past\_due\]
    B --> D\[paused\]
    D --> B
    B --> E\[canceled\]
    C --> E

To handle fulfillment, you can listen for webhooks for the subscription lifecycle and update your database accordingly. Paddle includes over 50 webhooks, but a basic billing workflow involves listening to just two:

Event

Purpose

`subscription.created`

A new subscription exists. Save the customer and subscription IDs against your user, and grant access.

`subscription.updated`

Something about the subscription has changed, like its status, items, scheduled changes, or billing period. Re-read the cached fields you store.

## Self-service for your customers

Customers expect to manage their own subscription without filing a support ticket. The customer portal gives customers a hosted page where they can:

-   Update payment methods.
-   View past invoices and download receipts.
-   Cancel, with a cancellation flows that surface offers before the customer leaves.

You can [link to the portal](https://developer.paddle.com/build/customers/integrate-customer-portal) directly from your app, or generate per-customer authenticated sessions for a more seamless handoff.

For a completely custom experience, you can build your own billing management screens in your app using the API or SDKs. Everything the portal offers is available for developers, too.

## Reduce churn with Paddle Retain

Subscription businesses lose more revenue to failed payments and avoidable churn than they realize. [Paddle Retain](https://developer.paddle.com/concepts/retain) is fully integrated with Paddle Billing, recovering failed payments and reducing churn automatically.

-   **Payment recovery and dunning** for failed payments, using ML-tuned schedules and acquirer-specific logic across millions of transactions.
-   **Cancellation flows** salvage customers at the moment they want to cancel with offers and win-back paths.
-   **Term optimization** nudges customers from monthly to annual plans at renewal, lifting LTV.

Retain works on top of Paddle Billing, using Paddle.js, Paddle Checkout, and the customer portal.

## Ready to scale

Paddle helps you unlock new markets and win bigger deals:

-   **Localized pricing** in [30+ currencies](https://developer.paddle.com/concepts/sell/supported-currencies), set automatically from your base price or configured per country.
-   **Global payment methods** like [Apple Pay](https://developer.paddle.com/concepts/payment-methods/apple-pay), [Google Pay](https://developer.paddle.com/concepts/payment-methods/google-pay), [PayPal](https://developer.paddle.com/concepts/payment-methods/paypal), plus regional methods like [iDEAL](https://developer.paddle.com/concepts/payment-methods/ideal), [Bancontact](https://developer.paddle.com/concepts/payment-methods/bancontact), [Pix](https://developer.paddle.com/concepts/payment-methods/pix), and [UPI](https://developer.paddle.com/concepts/payment-methods/upi). No need to add individual processors.
-   **Tax compliance** in [200+ countries](https://developer.paddle.com/concepts/sell/supported-countries-locales), including VAT, GST, sales tax, and digital services taxes.
-   **Hybrid billing support** means you can move subscriptions to invoices for larger deals in one-click or API call, with no data duplication.

## Next steps