There are certain well-worn areas businesses focus on to accelerate growth. You know that to drive acquisition, you need to learn more about your customers, run hard-hitting marketing campaigns, and come up with offerings so great that your customers will spread the word about them.
But one strategic lever many businesses don’t pull is creating a tailor-made payments strategy. That’s a major missed opportunity.
Most companies consider payments just another piece of the infrastructure, treating it like wallpaper. Unfortunately, that’s a short-sighted view. Forward-thinking subscription brands know that payments are the backbone of an excellent customer experience, whether someone is signing up for a trial, converting to a paid subscription, or deciding to renew for another year.
Here’s how to create a convenient, frictionless, and flexible payments experience that’ll serve as a powerful growth catalyst for your subscription business.
Focus on checkout
Consumers crave a convenient checkout experience, one that’s easy and quick to navigate and meets their needs through a customer-centric approach. The stakes are high for subscription businesses in particular: a bad experience could cost you not just the one-time revenue from a single sale, but also all future recurring revenue.
To optimize for convenience, make sure you provide a wide variety of payment options and honor your subscribers’ payment preferences by offering flexibility.
Recurly makes it simple for you to let your customers pay however they’d like with support for a wide variety of payment methods. Feel free to accept credit and debit cards, direct debit, and digital wallets, like Apple Pay, Venmo (popular among young consumers, because who doesn’t want to brag to their outdoorsy friends about their AllTrails subscription?), and PayPal.
Offering more ways to pay can drive revenue growth: for instance, Recurly merchants who enable ACH see a revenue lift of up to 181%, while those that enable PayPal see a revenue lift of up to 119%. And it does make a difference—26% of consumers will leave if they don’t see the payment option they want.
Additionally, Recurly.js enables merchants to create a custom, mobile-friendly checkout experience that’s fully hosted on your site while Recurly securely stores subscribers’ payment information. Alternatively, Recurly’s customizable, no-code-required Hosted Payments Pages enable you to get up-and-running quickly, and they’re automatically optimized for any device.
Finally, Recurly’s Wallet functionality enables you to honor your subscribers’ preferences by allowing them to choose between up to 20 payment methods for different purchase types (recurring or one-time) at the point of purchase. For instance, a BarkBox subscriber might choose to pay for their ongoing subscription via Venmo, but pay for a one-time add-on (like a chew toy) using their credit card. In another example, multiple departments within a single company using a SaaS platform might pay for different subscription offerings within that platform using department-specific credit cards. This kind of flexibility is key to retaining subscribers for the long term.
Reduce friction through flexibility
A payment experience filled with hurdles—from the inability to pay in different currencies to hassles with subscription management—can prove enormously frustrating for subscribers. On the other hand, the more seamless you can make payments, the quicker you’ll accelerate growth. Your payments strategy should enable easy geographic expansion and unlock new options for your customers.
Rapid international expansion has played a key role in the success of many subscription companies: just think about the worldwide reach of companies like Codecademy and Twitch. But that growth doesn’t come without some work behind the scenes to localize your payment options.
92% of consumers globally prefer to make purchases on websites that price in their local currency, while a third of consumers are likely to abandon a purchase if pricing is only available in US dollars.
To “act like a local,” make sure you integrate with the right set of gateways and enable as many currencies and languages as necessary. Recurly makes this simple: we have partnerships with 22 gateways, accept over 140 currencies, and support 18 different languages and dialects to make cross-border transactions seamless for you and your subscribers.
It might seem paradoxical, but part of eliminating payments friction is making it easier for subscribers to put their payments on pause. Whether due to a layoff or simply subscription fatigue, your customers should have the flexibility to temporarily pause their subscriptions. By offering pause functionality, you can significantly decrease your voluntary churn rates and increase subscribers’ lifetime value (LTV).
Mind your costs as you grow
Every subscription business loves faster growth, but not the higher costs and complexities that come with it. With the right payments strategy, you can mitigate payment declines and processing costs.
As you expand your subscription business to new markets, be thoughtful about the gateway(s) you integrate with. There’s no single best gateway out there: you’ll likely need to evaluate your business needs and experiment on a regular basis. You might even decide to route specific transactions through different gateways based on criteria like location or product type, since the way you route payments can positively impact your transaction costs and acceptance rates.
Say, for example, you’re expanding to Brazil or Mexico but don’t have a business entity in either of those countries. Because of local complexities, you’re normally likely to experience 60%-70% decline rates. However, if you use PrimeiroPay as your payment processor—now possible with Recurly thanks to an integration we’ve built with Adyen—your decline rate would shrink to as low as 10%-30%.
Occasionally, gateways experience performance hiccups: we’ve documented an average of 40 issues across the gateways we support per year. That’s why we highly recommend that subscription businesses partner with more than one gateway for every region they operate in and use one as a backup, in case the primary gateway goes down.
Recurly’s top 100 merchants integrate with 2 gateways on average, and Recurly merchants who enabled gateway failover saw over $21 million in revenue lift from rerouted transactions.
A smart payments strategy can help prevent unnecessary churn as your business grows. For example, Recurly’s new verify billing information endpoint feature allows you to access and verify the validity of your subscribers’ payment information, so you can run more efficient win-back campaigns by only targeting those subscribers. Additionally, our new Wallet functionality enables subscribers to designate a backup payment method, so instead of having to retry a failed payment you can simply “fail over” to the backup option. This makes renewals more seamless.
While many companies see payments as just a commodity, leading subscription businesses know that the right approach to payments can serve as a strategic advantage. A well-thought-out payments strategy can catalyze growth by helping you drive greater convenience, reduce friction, and reduce operational costs.
At Recurly, we’re laser-focused on helping subscription businesses grow. We don’t just want our merchants to take payments, but make them count. Check out everything we've added to the Recurly platform to help you boost customer acquisition, optimize for convenience, and diversify your revenue strategies!