How to Streamline Payment Processes for Revenue Efficiency

Payments-Blog

A streamlined payment process brings simplicity to your business. It helps reduce churn and build trust with customers. 

If the phrase “simple payment process” sounds like an oxymoron, keep reading. You don’t have to reinvent the wheel to make payments easier for your customers. A subscription management platform can help.

Why subscription business?

A seamless process starts with a seamless relationship. Subscription billing puts your business at a competitive advantage. It streamlines payments by promoting recurring payments and uninterrupted service. And it also encourages longer customer retention by incentivizing you to keep delivering products and services that add value and delight. Why end things when they’re just getting good? 

Your payments process should complement your business offerings. When it comes down to it, a complicated checkout process could cost you close to half of your sales.

Providing an efficient and transparent payment process starts with understanding the actual complexities behind the scenes, and investing in the means to minimize them. 

The challenges of subscription billing

Complexity

Subscription business and recurring payments build relationships — and relationships are complicated. The flexibility required for subscription billing creates complexity. Think about handling all of the events throughout a subscriber’s lifecycle, like mid-month signups, upgrades, downgrades, and pauses. Or consider subscribers’ desire to add a one-time item to their next subscription delivery. Without having the capabilities to handle these scenarios, you have to expect churn. 

Payment flexibility

While credit card companies automatically handle currency exchange, customers around the world are getting used to alternative ways to pay. That means your business needs to adhere to your global customers’ preferred method of payment, as well as their local currency. For subscription businesses, the ability to do this depends on which gateways are available.

What are payment gateways and why do they matter?

Payment gateways connect customers with merchants’ bank accounts. They help businesses receive payments and deliver revenue to the bottom line. They’re that intermediary in a transaction, like the digital version of a physical point-of-sale terminal.

Great. So I just need a gateway and I’m good to go? 

Well, one gateway isn’t necessarily enough for subscription ecommerce, especially if you plan to connect with customers in different countries. Multiple gateways remove these limitations for subscription businesses and provide you with a slew of benefits: strategic payment routing based on region, lower processing costs, simplified reconciliation, and support for multiple currencies.

A gateway is just one rung on the ladder. And for subscription businesses, it doesn’t stop there. Imagine entering every sale into a POS system by hand: it would be a very manual process. It’s not like you can just automate that process for recurring payments, right? But a subscription billing platform certainly can. 

Lack of visibility

When hearing that visibility over engagement, conversion, and retention metrics can help make more informed decisions, maybe your eyes glaze over as you imagine the graphics and data of endless metrics. 

Actionable metrics and insights are data points your business can put to use. Without reviewing metrics you can’t objectively see what is and isn’t working. Acquisition, conversion, and retention — it’s all in the numbers, sitting there, and if you don’t pay close attention, things can go downhill quickly.

Conversion and retention are among the biggest challenges for subscription businesses. Businesses that want to turn trial users into paying customers need to identify where their value stems from in their offerings, who their buyers are, and how to target similar prospects.

Churn

Before we dig into churn, you need to know some basics between voluntary and involuntary churn, and why your business needs to focus on both.

Voluntary churn occurs when a customer deliberately leaves your business due to lack of interest or value. Involuntary churn is when the exit is caused by some factor outside of your business offerings, such as payment failure. A subscription billing platform mostly helps combat involuntary churn.

Payments get declined for many reasons — 2,000, in fact. And it’s not affordable or scaleable to manually handle involuntary churn: you need a dunning strategy, smart and automatic retries, and Account Updater functionality. 

Businesses that have a streamlined payment process worry less about involuntary churn, and can focus more of their time and energy on improving their offerings to combat voluntary churn.

How a subscription management platform can help

Even if you understand the complexities around gateways, churn, and analytics, combating these limitations can be tricky without special attention and flexibility. That’s where a subscription management platform comes in. 

Subscription management platforms handle all aspects of the subscriber lifecycle. Complexities involved in subscription billing are best left to the pros.

Recurly streamlines the complexity of subscription payments. We’re a subscription management platform offering a dynamic range of benefits for subscription businesses:

1. Flexibility

Gateway options

Businesses can choose their preferred payment gateways, change them at any time, and create custom gateway routing based on unique business needs. Multiple gateways mean broader access and fewer geographical limitations to the payments ecosystem, so your business can continue to scale.

Preferred plans & payment methods

Recurly caters to your customers’ payment preferences, both in terms of method and local currency. This minimizes friction to ensure customer loyalty and retention.

Customers can pay any way they choose, regardless of location, whether by credit card, debit or direct debit, or digital payment methods like PayPal, Square Cash, and Apple Pay.

Subscription businesses should offer tailored plans according to business and customer needs. Providing plan options helps to funnel customers from free trial offerings to paid subscriptions. A subscription billing and management platform like Recurly helps companies logically organize and price their plans, so customers get what they need without having to pay for what they don’t. 

2. The right insights

Recurly provides the insights and reporting that your business needs to monitor subscription success and drive improvements. With the right metrics you can make more informed decisions quicker based on relevant data. 

Our customizable, out-of-the-box reports track the performance of your subscription plans, monthly recurring revenue, subscriber retention, recovered revenue, and more.

3. Automation

Automated invoices

Streamlined payments start with automated invoices. We automatically create invoices for all billing scenarios, including charges, refunds, credits, shipping fees, and taxes. Automatic billing ensures accurate invoices and scalable processes.

Integrations

A streamlined payment process needs seamless integrations. Recurly lets you easily connect with a broad variety of integrations, from CRM platforms to accounting systems. Keep your work together.

Reduced churn

No one can see into the future, but we can get pretty close by automating churn prediction. Recurly provides a reliable, immediate, and personalized process that helps prevent churn. Our decline management strategies can recover an average of 70% of failed subscription renewals. Nip issues in the bud to keep your subscription payments flowing.

Streamline payments with Recurly

We understand the complexities involved in payments. Let us simplify them for you, so your business can focus on growing and providing awesome products and services.

Contact our sales team to learn more. If you’re looking for more to read, see where your business stands in terms of churn rates by checking out our Recurly Research report:

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