When evaluating subscription billing systems, the comparison is not always 'apples to apples'. Our merchants benefit from several structural advantages that work behind the scenes to continuously keep your transactions healthy and minimize unnecessary subscriber churn.
Error Code Fidelity
The error handling for most subscription billing services is pretty basic: the transaction either succeeded or failed. Yet, the actual type of failure is incredibly important. That's why we categorized over 2,000 error codes from the dozen gateways we support down to over 60 unique errors.
For starters, we know if a card failed with a hard decline. There's no need to retry hard declines because the card details will never work again. Soft declines, on the other hand, should be re-attempted at different intervals depending on the failure type. For example, a debit card with a temporary hold will likely work again sooner than a credit card at its limit. Additionally, any decline by a fraud filter during a renewal should set off an alert; fraud filters should only be applied to the first transaction, otherwise they are only increasing your subscriber churn.
Subscription billing systems that rely on card details being stored in Authorize.Net's CIM are at a big disadvantage when it comes to errors during the renewal process. Authorize.Net CIM does not explain why a renewal failed. Because Recurly stores your card numbers in our PCI compliant card vault, we are able to get the full error fidelity from our Authorize.Net integration.
Every gateway has a unique set of parameters that must be set differently for the first transaction, or updated billing information, versus the recurring transaction. These parameters allow us to optimize all your initial and recurring transactions on your behalf.
On recurring transactions, we disable most fraud filters. Fraud filters validate that a card belongs to the cardholder and we do exactly that during the initial transaction. So, there is little incremental benefit in applying most fraud filters on recurring transactions. Have you ever moved, only to find your credit card no longer auto-renews for some services? These merchants are accidentally increasing their subscriber churn.
Recurly also leverages continuous authority, whenever possible. Continuous authority allows Recurly to continue charging a credit card on your behalf, even after its original expiration date has passed. For gateways that do not support continuous authority, Recurly is able to submit an updated expiration date for expired cards. Most issuing banks will accept the updated expiration date on recurring transactions.
Most payment gateways that token card numbers will not allow the card to be authorized after its original expiration date passes. Once again, Recurly has a big advantage over subscription billing systems that rely on the payment gateway's tokenization.
Through our extensive effort to categorize payment gateway errors, we know exactly why your transaction failed. Temporary failures automatically recover, soft declines are retried according to a dunning schedule, and failures requiring attention trigger an alert to Recurly support for follow up.
Recurly Adds Value Where It Matters
Many companies offer subscription billing solutions, but the 'mechanics' of subscription billing are not the most difficult piece to get right. Companies that choose to build their own 'homegrown' solution always miss the optimization opportunities, presuming that a 'decline is a decline'. Even the most expensive vendors frequently miss opportunities to optimize your renewal rates. We encourage you to take a close look at your existing decline rates by error type and contact Recurly.