7 SaaS Payment Gateway Considerations for Subscription Billing

Subscription-based billing models are common for today’s SaaS businesses. They provide steady revenue and help you foster long-term relationships with customers.

Despite the benefits provided by the pricing model, it does come with unique challenges, particularly around payment processing. Recurring billing payment cycles, multiple payment methods, upgrades and downgrades, and more can create challenges for businesses. Additionally, subscription billing options must meet specific financial regulations and security standards, creating additional complexity. To reap the benefits of subscription-based payment processing, you need a SaaS payment gateway that overcomes the challenges of the subscription and recurring billing payment model and provides a seamless customer experience.

Here are 7 of the top considerations for any companies evaluating payment gateways to support their SaaS subscription businesses.

Flexibility to Support Diverse Billing Models & Promotions

SaaS companies often employ various subscription billing models and options, such as monthly, yearly or usage-based plans. A robust payment gateway should provide flexibility to support these various models. With more than 80% of SaaS companies offering subscription services, according to Gartner, the importance of a payment solution that can adapt to the nuanced billing requirements of SaaS businesses increases.

Also look for flexibility that supports subscription-specifc promotions, including first month free or discounted months. Your subscription payment software should have the flexibility to support all of the ways you want to bill and sell to your customers rather than confining your options with more limited capabilities.

Truly Global Reach

As SaaS companies expand their reach, the payment gateway should facilitate global transactions effortlessly. According to McKinsey, cross-border B2B transactions are expected to grow at an annual rate of 6%, emphasizing the increasing globalization of business operations. Look for a payment solution that supports multiple currencies and payment types, ensuring that customers from different regions can subscribe to your software without friction. You also want to be sure that the payment gateway can offer global payment optimization, helping you to accept more payments at the lowest possible costs.

Optimizations to Increase Revenue

Failed transactions can eat into any company’s revenue, but there are specific capabilities for subscription payments that you should look for. Dunning management, or the ability to automatically retry transactions, is key to recapturing revenue from declined payments – one bank may decline the payment but another may approve it based on a number of factors or even another day.

Payment data often changes as well, and asking your customers to update their information can introduce friction into the process. Find a SaaS payment gateway that will automatically update card data when the card expires or changes for any reason.

Integration with Subscription Platforms

For SaaS companies that work with subscription platforms, it’s crucial to choose a payment gateway that integrates seamlessly. The goal is not only to work with the existing functionality but also to enhance it. The payment solution should complement the subscription platform, offering features that optimize billing processes and improve overall efficiency. This ensures customers don’t experience any disruptions during the purchase or renewal process.

Scalability and Predictive Revenue Growth

A SaaS company’s success often hinges on its ability to scale, and their SaaS payment gateway solution needs to be able to scale along with it. Choose a solution that can easily scale to accommodate the growing business, whether it is the number of subscribers, new geographies or additional business models. According to a Deloitte survey, over two-thirds of SaaS executives prioritize scalability as a key factor when evaluating payment solutions. Seamless scalability ensures that the payment infrastructure can keep pace with business expansion, enabling predictable revenue growth.

Compliance & Security

Compliance with industry regulations and robust security measures are non-negotiable when handling sensitive customer data and transactions. While you need to ensure that your chosen payment gateway adheres to PCI DSS standards, for example, some countries have specific regulations related to subscriptions. You need a payment gateway that doesn’t just enable your payments to be compliant and secure, but one that can also advise you as you grow your business.

Customer Support & Reliability

A reliable SaaS payment gateway is the backbone of your subscription billing. Look for a provider with a track record of uptime, minimal downtime and responsive customer support. Timely assistance can be critical in resolving payment-related issues and creating the best possible customer experience. After all, a good subscription model can increase customer lifetime value as well as customer loyalty.

Seamless Subscription Payments with BlueSnap

Selecting the right payment gateway to support your subscriptions is a strategic decision that directly impacts the growth and success of your SaaS company. By considering these factors, your business can build a solid payment foundation for sustained growth and provide seamless experiences for your subscribers.

Choosing a forward-thinking payment solution like BlueSnap will support long-term success. Our technology is designed to help businesses grow predictable revenue, supports any recurring model, streamlines operations and gives you the tools you need to expand globally.?

Choose from using our Subscription Billing Engine, using recurring payment functionality in our Accounts Receivable Automation solution or take advantage of one of our several integrations with recurring billing and subscription software, like Chargebee, Maxio, Zuora and more.

Using BlueSnap with your existing subscription software lets you immediately expand your subscription capabilities. You’ll be able to offer preferred payment methods and currencies, take advantage of auto-retries and account updater, and easily expand to accept payments in new geographies.

Talk to a Payments Expert to learn more.

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Frequently Asked Questions

How does a subscription service work?

If a company offers a subscription service and provides relevant payment options, then:

A purchasing customer may choose their preferred payment plan and payment method (debit or credit card, direct deposit, digital wallet, etc.).
The company will receive the order info and use a payment solution to manage the subscription billing details.
The payment solution stores the payment information and processes the payment request.
The customer is charged and then issued regular statements on the agreed-upon schedule.

What are recurring payments?

Recurring billing and subscription billing are essentially interchangeable terms for a payment model where a business automatically charges a customer’s credit card for products or services on a regular billing schedule.

Recurring payments occur when customers enter their billing information once and grant the merchant permission to charge them at an agreed-upon cost and frequency. Subscription services will charge recurring payments on a monthly or annual schedule, until the customer withdraws permission or cancels their subscription.

Can I use BlueSnap for recurring or subscription billing?

Yes – we have an award-winning subscription billing platform. We also integrate with multiple subscription platforms. Learn more about it here.