Yep...it has store backup on the ext SD...which is a lot better.
Made a mistake before by formatting my SD card and it wiped my original backup to the internal SD!
The paid version allows you to restore everything in bulk where as the free version you need to press restore after every app has been restored. So if you have hundreds of apps this can be annoying. Also the paid version allows you to do multiple back ups. This may not be necessary but sometimes you can get a corrupt backup. And of that's the only one you have..the data will be lost.
All in all the free and paid will eventually achieve the same result. But the paid is far more convenient in my eyes. I have the paid version now and its good :] hope that helps.