The High Cost of a Payment Gateway Outage

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Payment Gateway gateway failover

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At one time or another, most payment gateways experience outages and performance issues. It’s a fact of life that subscription businesses contend with because transaction success directly contributes to maximizing your revenue. 

In this post, we’ll outline a few straightforward tactics to avoid the high cost of a payment gateway outage and make sure your revenue engine keeps humming.

 

The high cost of a payment gateway outage

No one likes to think about the ramifications of a payment gateway outage. Let’s face it, it’s easier to hope it won’t happen and that you’ll deal with it in the unlikely event that it does. But that’s the kind of thinking that can cost your business big bucks. 

 

Subscriptions are impacted when a payment gateway fails

When a payment gateway experiences an outage or performance issues it has multiple, negative implications for your subscription business including both your ability to renew subscriptions for existing subscribers and the ability for new subscribers to sign up. You’ve worked hard to get both your existing subscribers, as well as attracting new ones so you don’t want to lose either.

Let’s unpack both scenarios so we can better understand how a gateway outage impacts your bottom line.

 

New sign-ups

When a payment gateway goes down, you lose the revenue from the transactions that can’t be processed. And for subscription businesses, this problem is dangerously multiplied. If a new subscriber is attempting to sign up for a subscription, they won’t be able to—and they may never return to try their purchase again. You lose not just their initial purchase revenue but also their subsequent recurring revenue. This loss of revenue can be particularly devastating to high-volume businesses that process a large number of transactions in a short timeframe.

Imagine if this happens during Cyber Monday or while streaming the Super Bowl. These are once-in-a-year (maybe once-in-a-lifetime!) subscriber acquisition opportunities.

Subscription renewals

When your payment gateway encounters a hiccup or an outage you won’t be able to process subscription renewals during the outage which impacts your ability to collect the recurring revenue you gain from the subscribers you already have. Queues for recurring transactions are paused until the primary gateway is back up and running. The main impact this causes is a delay in capturing renewal funds, though collection is attempted later.

 

How to protect your subscription business from payment gateway outages

Gateway Failover 

Recurly offers a Gateway Failover feature to provide business continuity when a gateway stops functioning properly. You set up a second payment gateway for each credit card and currency. Recurly automatically detects when your primary payment gateway suffers an outage or other problem, and then routes transactions to a designated backup or “failover” gateway. This way, you’ll keep processing subscription signups and one-time transactions without missing a beat.

Macabacus, a productivity SaaS company,  processes a large volume of transactions each day. When their primary payment gateway experienced multiple extended outages in mid-2019, it could have caused a lot of customer frustration and strained their sales and billing teams' resources. Ryan MacGregor, Managing Director at Macabacus said, “Using Gateway Failover technology, Recurly automatically activated our backup gateway, allowing us to continue to process subscribers' transactions. Enabling this feature was a no-brainer for us as we already had two gateways configured in Recurly.”

To learn more, check out our short gateway video and our documentation.

Wrap Up

Recurly supports many different gateways to help our merchants make subscriptions a competitive advantage. Evaluating a payment gateway? Check out 15 Critical Questions to Ask When Evaluating a Payment Gateway.

 

Why Subscription Businesses Need Multiple Payment Gateways: Download

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