Building a global SaaS product means navigating a complex web of international rules. This guide explains how to build a billing system with compliance at its core, ensuring you meet standards like GDPR and SOC 2 while respecting regional financial regulations.

Compliance-first billing is an approach where regulatory and security requirements are foundational to your billing system’s architecture, not an afterthought. Instead of simply processing payments, this model integrates data protection, security controls, and financial regulations from the very beginning.

This means building your system to answer critical questions from day one:

• How do we handle a user’s subscription data in line with GDPR in Europe?
• How do we prove our security controls are sound under SOC 2 for enterprise clients?
• How do we manage different tax laws and data retention rules in markets across the US, EU, and APAC?

Thinking about compliance first de-risks your business, builds customer trust, and makes scaling globally a much smoother process.

Initially, focusing on compliance can feel like a distraction from building your product, but it’s one of the most important investments for long-term success. A compliant billing system is a key asset that builds trust, unlocks markets, and strengthens your company’s overall security posture.

Here’s a breakdown of the key benefits:

• Unlocks global markets: You cannot legally operate in certain regions without adhering to their rules. GDPR, for example, is a non-negotiable entry requirement for the European market.
• Builds customer trust: In an age of frequent data breaches, users are wary of sharing payment information. Demonstrating compliance through certifications like SOC 2 shows customers you are a responsible steward of their sensitive data.
• Avoids costly fines: The financial penalties for non-compliance are severe. GDPR fines can reach up to 4% of a company’s annual global turnover.
• Improves security and reliability: Frameworks like SOC 2 force you to adopt best practices for data management, which strengthens the security and availability of your entire platform, not just your billing system.

The compliance landscape can be divided into three main areas: data privacy, security assurance, and financial regulations. Each has its own set of rules and impacts how you design your billing infrastructure.

The General Data Protection Regulation (GDPR) is a European Union law governing data protection and privacy for all individual citizens of the EU and the European Economic Area. Even if your company is not in Europe, if you handle the data of EU citizens, you must comply.

For billing, GDPR introduces a critical challenge: the “right to be forgotten.” A user can request that you delete their personal data. However, financial and tax laws in most countries require you to retain transaction records for many years.

The solution is to design your system to decouple personally identifiable information (PII) from the anonymized transaction record. You can then fulfill a deletion request by scrubbing the user’s personal details (name, email) while retaining the essential, non-personal transaction data (date, amount, product ID) for financial audits.

SOC 2 (Service Organization Control 2) is an auditing procedure that ensures a company protects its customers’ data. Developed by the American Institute of CPAs (AICPA), a SOC 2 report is a key benchmark for SaaS companies, especially when selling to enterprise customers.

It is based on five “trust services criteria”:

1. Security: Protecting the system against unauthorized access.
2. Availability: Ensuring the system is operational and accessible.
3. Processing Integrity: Verifying that system processing is complete, valid, accurate, timely, and authorized.
4. Confidentiality: Protecting information designated as confidential.
5. Privacy: Ensuring personal information is collected, used, retained, and disclosed in conformity with the commitments in the entity’s privacy notice.

For billing systems, SOC 2 compliance means proving you have robust controls for handling sensitive financial data, ensuring uptime for subscription processing, and maintaining accurate transaction records.

Beyond broad privacy and security frameworks, you must also handle regulations specific to the regions you operate in.

• Europe (EU): The Payment Services Directive (PSD2) requires Strong Customer Authentication (SCA) for many online payments to reduce fraud. You must also correctly handle Value Added Tax (VAT) for digital services, which varies by country.
• United States (US): The Payment Card Industry Data Security Standard (PCI DSS) is mandatory for any organization that accepts, transmits, or stores cardholder data. Though not a federal law, it’s a global standard enforced by card brands. Additionally, state-level privacy laws like the California Consumer Privacy Act (CCPA) add another layer of compliance.
• Asia-Pacific (APAC): This region is a patchwork of different regulations. Countries like Australia, Japan, Singapore, and South Korea have their own data privacy laws (e.g., PDPA in Singapore) that you must navigate if you have customers there.

Building a compliant billing system requires a deliberate and strategic approach. Here are four best practices to guide your implementation.

1. Create clear data retention policies: Only collect the customer data you absolutely need. Define and automate separate retention timelines for personal data (which can be deleted on request) and financial data (which must be kept for legal reasons).
2. Build robust audit trails: Log every significant event in your billing system. This includes subscription creations, upgrades, downgrades, cancellations, issued invoices, and any access to billing data by your internal teams. These logs are essential for SOC 2 audits and debugging.
3. Choose compliant partners: You don’t have to do it all yourself. Offload major compliance burdens by using third-party providers that are already certified. Your payment processor (like Stripe or Adyen) should be PCI DSS compliant, and your cloud provider (like AWS or Google Cloud) should have SOC 2 and ISO 27001 reports.
4. Decouple personal and financial data: Architect your database to separate PII from transaction data. This allows you to honor a user’s “right to be forgotten” under GDPR by deleting their personal information without violating financial laws that require you to keep transactional records.

Building a compliant billing architecture from scratch is a significant undertaking. Kinde provides foundational infrastructure that helps you meet your compliance obligations while accelerating your time-to-market.

By handling user identity and authentication, Kinde helps you secure the front door to your application. This is a core part of any compliance framework, as proving who a user is and controlling their access is fundamental to protecting their data.

Kinde is SOC 2 Type 2 compliant and provides features that are aligned with GDPR principles, giving you a strong, secure, and compliant foundation to build upon. By managing the complexities of authentication, user management, and security, Kinde frees up your team to focus on your core product, knowing that a critical piece of your compliance puzzle is already in place.

For more on Kinde’s security and compliance posture, you can review the following resources:

• Compliance
• GDPR
• Security at Kinde