Zuora Automates Subscription Billing and Payments

By Josh Catone

Zuora, which was founded by former Salesforce.com Chief Strategy Officer Tien Tzuo, believes that subscription payments are the future. “Why buy a DVD when you can subscribe to Netflix and access a whole library? Why install CRM software when you can subscribe to the world-class version online from salesforce.com? Why buy a car when you can subscribe to ZipCar and get the whole fleet?” goes their sales pitch.

Unfortunately, dealing with subscription billing and payments can be a major hassle — rather than charging every customer once, you have to deal with billing and payments multiple times per year for each user, often times on different schedules, and using different payment methods. Zuora has developed a platform for Software as a Service billing and payment processing that they hope addresses the unique needs of subscription-based businesses. Their first product, Z-Billing, which automates subscription billing, launched in may and has 40 customers.

The second part of their platform suite — Z-Payments, which handles, you guessed it, payments — launched yesterday.

Z-Payments addresses and automates the handling of issues that crop up in subscription billing that don’t apply to one-off product sales, such as failed transactions due to expired credit cards or cards that reached their limit, failure to pay, and customers being on different payment plans (some pay monthly, some quarterly, some on the first of the month, some on the third, or the tenth, etc.). Zuora’s product automates the handling of those issues.

“Z-Payments takes the pain out of recurring payments, so you can set up workflow and notification rules to automate your payment process, offer your customers multiple payment options, and ultimately get paid faster,” wrote Tzuo in a blog post. The new product integrates with PayPal, which many smaller web service providers already use for subscription billing, albeit clumsily.

Tzuo wants Zuora to become the de facto platform for SaaS billing. “Just as Amazon makes it easy to become an online retailer, Google makes it easy for anyone to advertise online, and PayPal makes it easy to accept online payments, Zuora’s vision is to make it easy for any company to build, manage, and grow a subscription business,” says the company’s about page.

Z-Billing customers will have free access to Z-Payments, which will also be offered as a standalone product on a subscription basis (naturally). Zuora raised $6.5 million from Benchmark Capital last March.

  • Kelli

    Aria Systems has been doing this for years.

  • It’s still a cool setup though, and one that could grow to become a leader in its niche. Just because one company is doing something doesn’t mean that another cannot (all other things being equal and legal, of course). Especially if the other company can do it better.

  • “Why buy a DVD when you can subscribe to Netflix and access a whole library?”

    Because I’m not wasting my quota on something I can buy for cheaper. DVD’s come with pretty covers as well. There is a greater sense of ownership with the physical, you can’t beat that with something virtual.

  • Daniel

    Do any of you have experience using Zuora? How were the design aspects of the “software as a service” handled – e.g. templating system, access to CSS, etc.? In short, how customizable is the look and feel of the site/store they host for you?

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