Our team is ready to unveil our biggest update yet: API v2 and support for multiple subscriptions on a single account. API v2 incorporates feedback we heard from our merchants and allows you to integrate with even more flexibility than ever before. For many customers, multiple subscriptions enables scenarios that were difficult workarounds with our first API.

API v2 Improvements

Over the past two years, we’ve heard from hundreds of customers that our first API works incredibly well. From day one, our REST API was designed to be easy to use. We’ve lived with it for two years and found several ways to improve it: better validation errors, more transaction details, reliable pagination, links to nested resources, easier authentication, and official support for creating plans, add-ons, and coupons via the API.

Updated Client Libraries

With the release of API v2, we’re also releasing three completely rewritten client libraries: PHP, Ruby, and Python. PHP now has better exception and error handling. The Ruby client no longer depends on ActiveResource, and it will take advantage of Nokogiri if installed for faster XML parsing. And our Python library is a dramatic update from the first version. An update to our .NET library is coming soon.

Because our API now supports better pagination, the client libraries can paginate through very long lists transparently using iterators. The libraries will automatically lazy load the next page of results when needed. The pagination also switched from page numbers to a cursor, which means the result list no longer returns duplicates if a new record is inserted while you are paginating the results.

Multi Subscription

Recurly was designed to take the pain out of subscription billing. Most merchants manage a single subscription per account and we solved that use case rather well. We took our time to really understand how successful companies manage multiple subscriptions per customer. Next, we built a new API from the ground up since we knew API v1 could never support multiple subscriptions. Finally, we added clarity to our UI to simplify multi subscription management. We hope you like the end result as much as we do.

Updated Documentation

Our documentation has been rewritten to complement our new API and client libraries. It’s fully up to date for API v2 and our client libraries. We pride ourselves on providing documentation that is clear, simple, and complete. This revision has required a complete refresh of our documentation, and we’re proud of the end result.

Step One: Define your own billing requirements – what are your needs?

Here is a punch-list of items for you to consider:

Be clear on the structure of your subscription offering:

• How many subscription plans will you be offering? One plan or multiple plans?
• What is the billing cycle interval? (Monthly, Quarterly, Bi-Annual, Annual?)
• Will you offer free trials?
• Will your subscriptions auto-renew, or terminate on some date?
• Will your business require one-time payments?
• Do you need optional items to be added? (Add-ons)

Define how you will you price your subscriptions:

• Are you charging a flat fee per month?
• Do you have a variable pricing component? (Requiring ‘metered billing’)
• Will your pricing change based on usage? (Tiered pricing?)

Communication Requirements:

• How and when would you like to communicate with your customers?
• What are your data integration needs? CRM? Finance/Accounting? Mailing lists?
• How important is it for your billing + subscriber status to be synced up with your application?

EXPERT TIP:

Step Two: Items to look for in a subscription billing provider

Think about your businesses end-goals and total cost of ownership (TCO).

Most subscription-based businesses ultimately care about the following:

• Minimizing Customer Churn
• Maximizing Lifetime Customer Value (LTV)
• Maximizing Return on Investment (ROI) – which means minimizing TCO

You cannot achieve these goals if your billing platform doesn’t support key daily functions efficiently. Your billing system should be a valuable tool, not an impediment.

PCI Compliance:

If your vendor is not PCI Level 1 compliant, ‘do not pass go’. You cannot afford to store your customer credit cards with a company that is not invested enough to achieve PCI Level 1 certification.

Functional capabilities:

Daily administration (This is frequently overlooked):

• Is there a Customer Support console? If so, is it functional? Intuitive to use?
• Search / Sort / Filter – How easy is it to find accounts?
• Account changes – How easy is it to make a manual override?
  • Upgrades/Downgrades
  • Pro-ration of accounting? Is this automated or manual?

Really push on this. Some very expensive vendors require 30+ clicks to make simple manual changes to subscriptions.

Customer Invoicing

Automated – Are customer invoices delivered automatically?

Manual – Can you create invoices manually?

Credits and Refunds (Both whole and partial credits)

This is key functionality to keep your customers happy. It needs to be incredibly easy to issue a credit or a refund.

Transaction History

It is always critical to be able to call up the transaction history for an account in order to provide customer support.

Marketing Support: Coupon and Discount code management

Your business might require coupons or discounts for promotional purposes, or channel discounts. Coupon and discount support needs to be seamless and easy to manage. Not all systems are created equal.

• How easy is it to set up a new coupon or discount code? (60 sec. max).
• Can you manually apply coupons or discounts to an account?
• How flexible is the coupon/discount functionality?
  • One-time, Limited Time, Evergreen applications
  • Percentage discounts vs. absolute dollar off?
  • Expiration date management?
  • Applies to specific billing plans?
  • Limited count offers? “First 500 subscribers receive…”

Error Handling: Credit Card Error and Decline Management

Like it or not, your recurring payments will encounter errors. This is a given when you are charging credit cards on a recurring basis. Cards will be declined for a variety of reasons, and from a variety of sources.

Q: At the highest level, you need to know whether your provider stores credit cards and tokenizes cards in their own environment.

A: If the answer is no, then that vendor cannot remediate credit card errors and declines on your behalf. It’s that simple.

Reporting: Data or Business Insights?

What kind or reporting capabilities do they provide?

Revenue by period, Revenue by plan, Monthly Recurring Revenue (MRR), Cohort analysis, Credit card decline rates, Lifetime value analysis?

What is the support model? Look at support forums and evaluate quality and timeliness of responses.

Step Three: Evaluate Total Cost of Ownership

Total cost of ownership is often underestimated.

It breaks down simply to the following four buckets:

1. Cost of Integration (often a hidden cost – Recurly takes days rather than months)
2. Cost of Administration
3. Cost of Customer Churn and Non-renewing subscribers (another hidden cost)
4. Marginal Cost of Billing Service

Is your billing system working for you? Or are you working for your billing system?

Expert Tip:

Most evaluations of subscription billing providers erroneously focus only on #4. Total Cost of Ownership surprises most companies. Ease of integration, ease of use and ease of administration can be very costly. (Employee resignations have occurred over frustration with complex billing systems)

Pricing Gotchas

Be clear on Setup Fees, Cancellation Fees, Extra charges.

(Recurly does not charge for any of these)

Network Availability

Don’t be shy. You’re the customer.

Ask for third party auditing of network uptime and availability reports. [Recurly has proudly maintained 99.994% uptime in 2011]

Final Thoughts:

Expensive ≠ Better

Your subscription billing system should work for you, not the other way around. Paying more for an expensive enterprise ‘solution’ does NOT mean that you get more value.

If you consider the elements from this guide, you will not only be much happier with your ultimate decision, but your business will have a greater chance of success.

If you would like to learn more about Recurly’s capabilities, please contact sales@recurly.com

Step One: Create your subscription plans

Once you sign up, you will be asked to create your first subscription plan. Most businesses like to create more than one plan so that their users have more choice in terms of features and pricing. Multiple subscription plans also create a nice ‘migration path’ for your users to upgrade once they’ve tried out your service.

Here is a 60 second video demonstrating how easy it is to create your subscription plans:

Step Two: Set up your payment gateway

In order to process payments for your business, you will need two things:

1) Merchant Account
2) Payment Gateway
Or..
3) Some providers act as BOTH the Merchant Bank and Gateway
a. Intuit Payment Solutions (allows automatic integration with QuickBooks)
b. PayPal (Website Payment Pro)

Step Three: Use Recurly’s Hosted Payment Pages to accept payments

Now that you’ve created subscription plan(s), you have checkout pages (we call them Hosted Payment Pages) for each plan. Your users can access these pages to easily sign up for your service!

Go Live: That’s It! You’re ready to LAUNCH your subscription business.

We’re glad you asked – because this could save you many hours of development, and many curse words before learning the hard way – on your own precious company’s dime.

Every payment gateway is designed to handle one-time transactions. Some gateways like PayPal and Authorize.Net  offer recurring billing or subscription billing functionality, and while they generally work for simple recurring billing integrations, we’d like to explain what you should expect to receive by signing up with Recurly rather than integrating directly with your payment gateway.

Recurly is designed as a complete billing system for recurring billing. This means that we have put careful thought and consideration into the most common pain-points experienced by business owners handling the day-to-day billing and related customer support issues that can come along with subscription billing.

Consider this – Unlike payment gateway solutions, Recurly lets you handle all of the following scenarios elegantly:

1. Customers upgrade and downgrade between plans easily – Recurly handles proration and customer communications
2. Billing cycle changes (e.g. customer signs up for monthly plan and elects to change to yearly plan)
3. Easily issue customer credits towards future service
4. Create email invoices
5. Easily process refunds
6. Process one-time transactions
7. Customizable hosted payment pages for customers to subscribe & update their billing info
8. Provide billing support with an account management console for your customer support
9. Easily change payment gateways without any business interruption. Recurly stores your data safely and securely.
10. Keep your own systems easily in sync with secure XML notifications and/or emails.

Things To Consider Before Building Homegrown Billing Solution

Here are some common pitfalls when estimating the work required to build your own solution:

Customer Upgrades and Downgrades

Most businesses prefer to offer multiple subscription plans. It’s good practice to create a ‘migration path’ from an easy, no risk trial to the plan with the plan with the maximum expected lifetime value. This is great business practice, but the billing intricacies are non-trivial.

Let’s start with proration, it means prorating the current month’s charge against the current payment — this can get complicated quickly once you also factor in trial periods. If your customers decide it’s too much and want to downgrade, you might want to wait until the end of the current billing cycle — now you’re tracking state. These simple tasks can take months to build on your own; Recurly gracefully handles these situations with a single API call.

Failed Payments

Recurring billing APIs typically leave you in the dark when a payment fails. On average, 5-10% of your payments will fail every month due to changed credit card numbers, expiration dates, and accounts overdrawn.  (The longer the billing cycle, the higher the failure rate.) As part of offering a subscription service, you need to follow up with these subscribers to keep their billing information accurate. Recurly makes it easy to follow up with your past due accounts and gracefully collect their new billing info which eliminates costly customer service overhead.

Account Management

Subscriptions come with customer support requirements. This is a commonly underestimated cost, and Recurly makes it much easier for your company to manage without building out expensive custom solutions. Your customer service dept. can view subscription information, issue credits & refunds, and more. Any change made in Recurly will be pushed back to your web application with our Push Notifications and REST API.

Employee Retention

We like the business we’re in, but we’ve never claimed that billing is sexy.  It turns out that many of our customers have come to us AFTER having built homegrown subscription billing solutions. Beyond the expected engineering and customer service challenges outlined above, the net effect on an organization is low employee retention. Engineers typically want to work on the company’s core product. After spending 3-6 months in the “billing department”, many engineers naturally seek new employment.
When you outsource your subscription billing to Recurly, you’ll dramatically reduce your total cost of ownership related to each of these areas.

• Engineering Development Time
• Ongoing Engineering Management and Maintenance
• Customer Service and Support
• Recruiting and Training to get new (replacement) employees up to speed.

Sign up for Recurly.

It’s free to sign-up, and priced to pay-as-you-go. Your business will thank you.

Instead of 4- 6 weeks, how about a 24 -48 hour approval time? Better yet, check this out -

• No application, sign-up or cancellation fees
• Extremely competitive rates (Intuit provides both merchant account and payment gateway, so no duplicate fees)
• One-Click integration with your Recurly Subscription Billing Account
• Automatic integration with QuickBooks accounting software

Intuit Subscription Billing Solution details here.

The good folks at Intuit really like what Recurly is doing for small business owners – particularly that we’ve made it much easier for merchants to launch subscription businesses.  So, they’ve stepped up with a really compelling offer and a 1-800 phone number to make your merchant account provisioning as quick and painless as you can imagine.

There is really no reason to live with less than spectacular payment processing. Intuit is a great solution for merchants in the United States, looking to serve customers from anywhere in the world.

-Get going with subscriptions!

The Recurly team

Press Release

1. Signup for a recurring billing service
2. Create a signup form that accepts the billing information
3. Create a page for the user to update their billing information
4. Allow the user to cancel their subscription
5. Sell your product or service and money

The above will get you up and running with subscriptions.  However, there’s a lot missing from the above picture that you won’t realize until you roll out your new billing system.  If your startup is new to subscription billing, there are a few key problems you’ll soon encounter.  Knowing about these issues will help you budget your development resources appropriately and help you evaluate your recurring billing options.

Declined Recurring Payments
For starters, what happens when one of the recurring payments fails due to a declined or expired credit card?  Will your system know to alert the user and/or cancel their subscription?  Can you get a list of past due accounts?  And, will the system continue billing the user or will it stop until their payment information is updated?

When a card is declined during the subscription renewal, you need to alert the customer and give them a way to update their billing information.  If they update their billing information in a timely manner, then bill them the missed amount.  Otherwise, the appropriate action is to cancel their subscription and transition their account back to a free account.  Unfortunately, many recurring billing APIs make it non-trivial to determine if a recurring payment failed.  And, if the user updates their billing information, verify that the service will collect the missing payment — this should happen immediately as part of the billing info update process.

Upgrades and Downgrades
If your site offers multiple subscription types, billing intervals, or quantities, then your customers are guaranteed to ask for upgrades and downgrades of their subscription.  If you start offering your subscriptions without a means for the subscriber to modify their own subscription, then you’ll receive several support requests.  Hopefully your support staff has the tools to modify the subscriptions or else you will miss the opportunity to make more money by allowing your users to upgrade.  And, a few users will be more than unhappy.

Of course, not all recurring billing APIs will allow you to upgrade or downgrade like you would expect.  Typically, an upgrade (additional quantity, add-ons, or service level) should happen immediately.  To do that, the remainder of the current term needs to be prorated and billed immediately.  Not all recurring billing services do this — some will require you to wait until the renewal to charge a new amount.

Downgrades or billing cycle changes can be just as tricky.  These events typically occur at the end of the current billing cycle, since the customer has already committed to paying for their current term.  These changes are doable with almost all recurring APIs, but most services will require you to perform the calculations to get the changes just right.  Buffer for some development time and lots of testing here.

Customer Service Tools
Does your billing system give your support staff the ability to lookup and modify accounts?  Your subscribers will want you to make changes (either by contacting you with a phone call or email) on their behalf.  If it takes an engineer to make subscription changes because you haven’t built the tools for your support staff to handle the modification, then you’re not using your resources efficiently.  Other users will expect your support staff to be able to offer them credits or refunds if something should go amiss.  Your support staff should be able to handle these requests immediately to minimize any chances of chargebacks or upset customers.  I strongly encourage you to give your support staff the tools necessary to support billing requests without involving a developer with database access.

Reporting and Metrics
Are you tracking your subscriber metrics?  Your payment gateway will tell you about the dollars and cents moving through your account but it doesn’t know anything about subscribers.  You’ll want to know as much as you can about new signups, upgrades and downgrades, cancellations, missed payments, failed subscribe attempts, etc.  Out of the box, most recurring billing services fail to provide these reports.

What happens if my business grows?

When you sign up for a merchant account, your application details the typical transactions you’ll process.  If you’re a start-up and you experience a rapid growth (good for you!), then you may be in for a surprise.  Banks scrutinize their merchant accounts continuously.  As part of that process, they’ll actively profile all your transactions.  If there’s a sudden spike in dollar amounts or the average transaction amount changes, the bank may review your account.  Or, they may not be so nice and you’ll receive an account termination or suspension notice.

If your business is like 97% of e-commerce sites out there, your income stream will be pretty steady and this isn’t a concern.  If your company is an internet start-up and the sky’s the limit, your initial revenue stream is going to be unpredictable.  Be upfront with your merchant account provider and ask about the review process should your transaction profile change.

If I offer yearly subscriptions, do you gradually release the funds or are all the funds available immediately?

Recurring revenue is great, that’s the beauty of selling a service.  However, the merchant account bears a small risk when you charge upfront for that service.  If you’re renewing the subscription on a monthly basis, the risk is pretty minimal and your merchant account will be happy.  But your most dedicated customers may want to pay upfront for a yearly subscription and get a little discount.  That’s great.  Be sure to ask your merchant account how this revenue is treated.

When you collect payment upfront for a year, the merchant bank is liable for those funds for duration of the year.  Ideally, your company is established and your merchant bank will release the funds immediately.  However, your bank may not do that if you’re a start-up.  In that case, ask if the yearly subscriptions can be released 1/12th every month.  That will certainly make your bank more comfortable with your service and less likely to freeze the entire merchant account, should a red flag ever be raised.

Who owns the payment gateway account?

When you sign up for a merchant account, the bank will likely be a reseller for a payment gateway (like Authorize.NET or CyberSource).  And, they’ll likely be able to give you a discount on the setup fee for the payment gateway, in addition to handling some paperwork for you.  Sounds great.

What happens if you ever need to change merchant accounts? You’ll likely need to open a new payment gateway account too.  When a reseller sets up the payment gateway account, they own the account and it cannot be updated to point to a different merchant account as part of that setup.  If you open the payment gateway account yourself, switching merchant accounts at a later date is not an issue.

Of course, this usually is not much of an issue if you’re a typical e-commerce site and you’re processing a bunch of one time transactions.  If you’re accepting subscriptions and you depend on your payment gateway to securely store your credit card information for your recurring billing, then it’s a problem.  If you ever switch payment gateway accounts, your subscriptions will stop working.  Now, that’s important.

Is there an intermediary (Merchant Service Provider) between the merchant account and the payment gateway?

If you sign up with a fairly large bank for your merchant account, they may communicate directly with the payment gateway.  If your bank is a little smaller, they may use an intermediary, known as a Merchant Service Provider, to communicate with the payment gateway.  While in most scenarios this really does not matter, the intermediary may introduce a little more lag into the communication and it may cause some variation in the error messages returned from the payment gateway.

In one scenario that I have seen, switching a merchant account while keeping the payment gateway the same introduced a new error message; “Invalid configuration in payment gateway.”  Investigating this error message was a major headache as multiple parties were involved in the transaction and each pointed the blame at someone else without identifying the problem.  In the end, we found that all the credit cards we investigated with this error were legitimately declined by the end user’s bank.  Due to the various parties involved in the transaction, the real reason for the decline was lost in translation and we were left with a generic message.