Lago: The Open Source Engine for Your Subscription Billing
If you've ever built a SaaS, you know the pain. You get your core product working, and then you hit the billing wall. Integrating with a service like Stripe Billing or Chargebee gets the job done, but it often means ceding control, dealing with black-box pricing logic, and watching a significant chunk of your revenue disappear into transaction fees.
What if the core of your billing system lived in your own codebase? What if you could model any pricing plan—no matter how complex—without waiting on an external provider to support it? That's the premise behind Lago, an open-source billing API that's positioning itself as a powerful alternative.
What It Does
In a nutshell, Lago is an open-source billing and usage-based metering engine. You host it yourself (or use their cloud offering), and it provides a set of APIs to handle all the tricky parts of subscription billing.
It takes care of:
- Pricing Models: Simple flat fees, per-seat pricing, tiered pricing, and usage-based billing.
- Metering: Tracks customer usage in real-time, which is essential for things like API calls or compute time.
- Invoicing: Automatically generates and dispatches invoices based on the billing cycles you define.
- Analytics: Provides data on your key revenue metrics.
Instead of being a full-stack payment processor, Lago acts as the logic layer. It calculates what customers owe, and then you can use its webhooks to trigger actual charge operations in Stripe Payments, GoCardless, or any other payment gateway you prefer.
Why It's Cool
The cool factor with Lago isn't just that it's open source; it's about the control and flexibility that comes with it.
- Model Any Pricing Plan: The core of Lago is its powerful system for defining plans and charges. You can create complex, graduated pricing tiers (e.g., first 1,000 units cost $X, next 2,000 cost $Y) that are often cumbersome or impossible in other systems. This is a game-changer for devtools and infrastructure companies.
- Bring Your Own Payment Processor: You're not locked into a single ecosystem. Lago calculates the invoice, and your application uses its preferred payment gateway to collect the money. This can save you a fortune on payment processing fees over time.
- Self-Host for Ultimate Control: For companies with high compliance or data sovereignty needs, being able to host the entire billing infrastructure on your own servers is a massive advantage. Your customers' billing data never has to leave your environment.
- It's an API, Not a UI: Lago is built for developers first. You integrate it into your application's backend, allowing you to build custom billing experiences and workflows that feel native to your product.
How to Try It
The easiest way to kick the tires is with their cloud offering. You can sign up for a free account on the Lago website and start playing with the API immediately without any setup.
If you're the DIY type and want to see the code in action, the entire project is on GitHub. You can run it locally with Docker in just a few commands:
git clone https://github.com/getlago/lago
cd lago
cp .env.example .env
docker-compose up
This will spin up the Lago API, along with a Postgres database and a Redis instance. Check out the README for detailed instructions on making your first API calls.
Final Thoughts
Lago isn't going to be the right fit for every project. If you're a solo founder building an MVP, the convenience of Stripe Billing's all-in-one solution is probably still your best bet. But if you're at the stage where billing complexity is becoming a bottleneck, or the cost of third-party fees is starting to hurt, Lago is an incredibly compelling option.
It gives developers the tools to build a billing system that is as unique and powerful as their own application. For any team tired of bending their business logic to fit a third-party service's mold, Lago is definitely worth a long, hard look.
Found on @githubprojects