Keep Your Money… and Clients: Subscription Billing


Most businesses based on recurring payments model involve subscription billing. Moving from single payments is effective only when your clients are satisfied. Subscription churn means recurring revenue cuts and should be dealt with swiftly.

The problem

Competition drives innovation and technology today is all about improving customer experience. No pay means no play: most people unsubscribe just by forgetting to pay or having difficulty understanding payment settings. Thus, service provider’s revenue falls 5% or even more.

ATMs and even bank cards require going through a quest-like process with websites, passwords and confirmation codes in order to pay bills. These are the barriers, here’s what you should do about it.


The idea is dead simple: submitted payment information is used on the recurring basis. Both Appstore and Google Play do it, why not do it yourself? Thus, customer satisfaction is greatly influenced by eliminating the need for remembering to pay for internet access, mobile services, apps and more. On the other hand, it allows you to collect most of their payments and provide services with no gaps.

Recurring billing automation adds value to your selling point: your clients are relieved of anxiety and have more time to think about your next offer. Now you have room for cross-selling and up-selling moves. In addition, both sides benefit from stress-free renewal.

Subscription churn is mostly related to psychological reasons. Billing automation plays on your side when clients are about to switch to a competitor — they have to cancel it first instead of just going away.

Hydra’s model illustrates this principle by comparing two telecom companies, both with 30k prepaid customers and 2% monthly growth rate. First one (blue line) has 2,5% churn rate and 1,6% for the second company (red line) with billing automation system on. The results speak for themselves: 25% growth in 2 years.

How to promote it

Any innovation has to be served and explained. Promoting auto subscription should involve special deals, discounts or cashback rewards for those who are willing to switch to it.

You should pay attention to new clients and offer auto subscription to them right away. In addition, blocked users may benefit from switching to recurring payments in order to eliminate gaps when they forget to pay.

Alerts, blog posts and instant messages are the tools you have available when reaching out to your customers and explaining options they should know about. Here are the triggers:

  1. Auto subscription is on
  2. Card is about to expire
  3. Card info has been updated
  4. Card is about to be charged (1–2 days)
  5. Payment has been processed
  6. Auto subscription has been cancelled

Please, be aware of spam filters and use transactional email services in order to guarantee customer awareness. Unsubscribe links should not be hidden, treat it as required email footer content.

Things to consider when choosing a payment gateway include secure and stable connection, transaction failures handling and monthly charges limits. This way, you’re going to be right on course to growth, keeping your clients and money.



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