Top Ten Reasons to Use Recurly vs. Payment Gateway Subscription APIs

posted in:
Billing Subscriptions Payment Gateway

The short answer is: Flexibility and Total Cost Of Ownership

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.

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Recurly provides enterprise-class subscription management for thousands of businesses worldwide.