Before the age of online shopping, purchasing products – let alone services - was a long and tedious task. All of your favorite stores were laid out across the city, meaning you had to drive from one end to the other to get the best deals for everything on your list. Then came the guy with the million-dollar idea of combining all the best stores into one central hub – the shopping mall. Now, to get everything you need, you can just go to one location to pick up all the items on your list within a 500-meter radius. Isn’t that convenient! The same principle should apply to your subscription billing and payments system.
Once you have made the switch to automated subscription billing and management, you’ll need to decide which payment gateway is the best fit to pair with your billing platform so you can start processing customer payments. Within your subscription billing ecosystem, the job of your billing and management platform includes automating your monthly invoicing, providing your customers with a self-service portal for easy subscription changes, and recognizing revenue in compliance with the ASC 606 revenue recognition standards. In other words, your subscription billing and management solution is there to manage everything that happens before your client submits their payment.
As a result, many subscription billing and management solutions do not have the capability to process payments as a part of their system. This means, when it comes to the actual payment, these platforms need to be integrated with a third-party payment gateway, such as Stripe, PayPal and Authorize.net, to allow you to accept various credit card payments from your customers. This means having to manage payment processing workflows separately, and having to toggle between two systems when you need to reconcile a chargeback or handle a failed payment. What a hassle!
There is a better way. Imagine managing the entire billing process from invoicing to payment processing, all in one solution...
So much more than just a payment gateway
This info sheet discusses how integrating your payment processing with your subscription billing and management platform will reduce late and failed payments by 700%.
1. Ease of Signup
For smaller companies, the thought of having to set-up and configure a third-party gateway with their independent subscription billing solution is daunting – and rightfully so. It is a time-consuming process which requires knowledge of and consistency between two separate systems. Connecting your subscription billing and management system to a payment gateway on your own can be complex and anytime you need to reflect a complex process within two disparate systems you increase the risk of error into the process.
If your subscription billing and management platform already offers a fully integrated payment processing solution, all the heavy lifting has already been taken care of for you. All you need to do is plug in your information and begin processing your payments within minutes.
2. Reduce Late and Failed Payments
The biggest pain for many companies with a recurring billing model is involuntary churn – this happens when your customers drop your service despite their desire to continue their subscription. This kind of churn usually occurs because of an expired credit card or a customer has had their card lost or stolen - and they have not updated their payment method in your system.
It is much more difficult to get your customers to take action than it is to just do things for them. Asking customers to update their payment information themselves creates a set of hurdles for them to jump through. Many won’t respond, resulting in involuntary churn, and some will simply view this as more of a hassle thank it’s worth, again resulting in churn. Either way, this is an interruption to your revenue stream. Roughly 3% of customer’s credit cards expire each month, meaning close to 36% of payments are at risk to fail each year due only to expired credit cards.
When you manage your payment processing with Fusebill Payments as part of your Fusebill subscription billing and management platform, you are able to bypass this issue through the use of the Account Updater feature. Account Updater allows your customers’ credit card information to be updated automatically, directly from the credit card company whenever new card information becomes available, without you OR your customer having to take any action. The resulting reduction to involuntary churn is a win-win for both you and your customers!
3. Better risk and fraud prevention
When you manage payments as part of your subscription billing and management ecosystem, you are able to improve risk and fraud protection for your business, which permeates through all aspects of your subscription billing and management ecosystem. This means that every time your customers interact with the hosted registration pages from your subscription billing and management solution, the risk reduction algorithm from the payments arm of your ecosystem will kick in. This algorithm uses invisible threat tokens that capture the customer’s information (such as IP address, location etc.), which is submitted, along with their credit card information, to help weed out fraudsters. This helps you to reduce chargebacks, which cost merchants about $11.2 billion in lost revenue in 2015.
Say goodbye to late and failed payments
Watch this free webinar to discover how Fusebill has helped Agemni customers grow their business and decrease time spent on billing by 80%.
4. One system to manage
Many business challenges arise from having siloed applications for subscription billing and management systems. These challenges can affect your company’s growth as a result of the disjointed and inefficient processes they create. By managing your payments as part of your subscription billing and management ecosystem, you benefit from having one system to manage. This means you no longer have to waste valuable time calling multiple companies for support-related issues. With an integrated subscription billing, management and payments solution, you benefit from the one-stop-shop approach – where all your billing, payment processing and subscription management issues can be resolved through a single source. Your support tickets get resolved faster, allowing you to spend more time focusing on the aspects of your business that need your attention the most.
The seamless integration of your subscription billing and payments arms also facilitates accurate and real-time financial reporting across your entire billing lifecycle. This gives you a complete picture of your finances from invoicing, all the way up to the payment stage. You now have a single version of the truth across your entire subscription billing lifecycle.
Let Fusebill be your one-stop shop for all your subscription billing, management and payment needs. Learn more about Fusebill Payments.
Enjoy having the time to read our blogs? Learn how you can spend 80% less time on billing with billing automation. Fusebill simplifies subscription and billing management by automating many manual accounting and financial processes and workflows.