Last editedFeb 20232 min read
From predictable income to good relationships with clients, a subscription business model comes with numerous advantages.
If you’ve opted to adopt this coveted business model, you may be asking yourself the question of how to set up subscription payments. And you’re in luck, as fortunately it’s pretty simple.
In this post, we’ll run through how to take subscription payments and some of the software solutions you can get to help payments run smoothly.
What are subscription payments?
Subscription payments, also known as recurring payments, are payment systems whereby customers pay for their use of a business’s services at set intervals, typically monthly or annually.
Examples of companies which use subscription billing include the National Geographic magazine and everybody’s favourite streaming site, Netflix. In order to facilitate recurring payments, subscription businesses often use automated payment software solutions.
How to receive payments from subscriptions
Setting up a subscription billing system is fairly straightforward and typically involves set up via a subscription billing software.
While the software will do the bulk of the work for you, the process can be made easier by understanding the different systems involved:
Merchant account
A merchant account is a kind of bank account where funds from debit and credit card sales are deposited.
Payment gateways
Payment gateways connect with credit card companies to facilitate online payments. The gateway provider is in charge of the security, processing and depositing of funds.
Subscription management
Subscription management works with payment gateways to make sure the correct customer accounts are charged the right sums of money at the right intervals.
Analytics
Billing software solutions usually provide analytical insights into sales, customers and revenue.
Dunning
Some solutions will automatically remind customers when they need to update their payment information. This can either be done to preempt a card expiration, or following a failed transaction.
Top 5 services for managing subscription payments
There are a huge range of subscription payment services available to choose from. Below are some of our top picks:
Chargebee
Chargebee is a great subscription software solution as it comes with an impressive range of features, products and customisations. The platform itself is simple to set up and navigate, plus there are free plans available for small businesses just getting started and want to keep costs to a minimum.
Zuora
Although one of the more expensive subscription billing software platforms out there, Zuora is an excellent option for big businesses generating high-revenues. This is because it comes with extensive features which more established businesses will benefit from. With Zuora’s subscription billing system, businesses can also tailor their plan and package to their individual business requirements.
Chargify
Chargify is industry tailored to Business to Business companies, and is one of the few subscription software solutions made for B2B SaaS. Chargify comes with a range of features directed at meeting both customer and business needs. These include subscription management, business reports, revenue analytics, and recurring billing, among others.
Recurly
Recurly is one of top subscription payment solutions on the market, and can be adapted to both large and small businesses. What makes Recurly special is its dedication to optimising and maximising revenue, which it achieves via its exclusive Revenue Optimisation Engine.
Subscription billing with GoCardless
GoCardless can help streamline the subscription billing process by enabling businesses to collect subscription payments directly from their customers' bank accounts. This saves businesses valuable time as they don’t have to remind customers to update their card information, or chase up on late payments. In fact, businesses can get paid up to twice as fast by accepting GoCardless payments on their online invoices.
Plus, retrieving funds directly from customer bank accounts, via direct debit, puts the business in greater control of incoming payments as it is pull based. This means the business controls payment amount and date and can therefore avoid revenue loss due to involuntary churn or non-payments.
And it’s not just for recurring billing. GoCardless can be used both for recurring and one-off payments. Plus, you don’t have to worry about how it will fit in with your other software solutions. GoCardless integrates seamlessly with 300+ partners, including major accounting and invoicing software like Xero and QuickBooks, putting payment visibility right into the workflow of the business.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.