Payment gateways for subscription businesses

For businesses that operate on a subscription-based model, reliable payment is of paramount importance. It’s a model that has proven spectacularly successful for brands such as Spotify and Netflix, and even for smaller businesses that rely on monthly or annual payments.

Given that it’s a model that relies on recurring payments, having a secure and consistent payment gateway in place is arguably even more important for a subscription business than for a business based around one-off payments.

Payment gateways boast a flexibility that other recurring payment systems can’t compete with. They connect directly with credit and debit card companies, whether you’re online or in-store (via a point-of-sale solution), and allow for quick and simple processing. Some payment gateways also offer the option of switching to merchant accounts, which is great for smaller businesses wishing to scale without having to change their entire payment system.

There are dozens of payment gateways to choose from, so today we take you through what we believe to be the five best payment gateways for subscription services.

5. PayPal

While it might be the most well-known name on the list and is ideal for merchants that want to offer customers a checkout experience that they can use with their existing PayPal wallets, it’s a payment gateway with high fees that cuts heavily into your bottom line. So you’re paying a lot for that familiarity. While it can be used for recurring payments, PayPal also experiences a higher failure rate than other solutions, so it lacks the reliability of more affordable solutions too.

4. Recurly

For businesses just getting started out, Recurly could be a good underdog option as it’s very easy to set up. Indeed, the Recurly website states you should be up and running within half an hour. It also integrates organically with several other payment gateways, and boasts three distinct subscription plans with scaling fees and a fixed-recurring model for subscription businesses. Note that the core plan takes 0.9% of your revenue.

3. Adyen

The end-to-end payments solution offered by Adyen and its broad range of payment methods has made it a favourite among SMEs. While it is a powerful payment gateway solution, it also has limited functionality as far as failure resolution is concerned, so might not be the most reliable option for a recurring payment gateway. As with Stripe, it’s also a card-first company so might be best used as a complementary solution rather than an all-in-one solution.

2. Stripe

Stripe is an all-in-one payment solution that also includes a range of add-ons that aim to make life easier for online businesses. All payments are fully integrated, and there’s broad global coverage, which is ideal for merchants dealing in global markets. It is a card-first company which means many products are not optimised for a broad range of payment methods. Its out-of-the-box subscription solutions are also functional, but far from exhaustive. It is, however, a solution that represents a very strong complementary solution for GoCardless users.

1. GoCardless

Unlike competing payment gateways, GoCardless has been built from the ground up for subscription and membership payments. The world leader in bank payments, GoCardless offers a complete suite of payment solutions that help businesses reduce all the costs associated with payment. When it comes to fraud prevention and a broad coverage of all bank payments, GoCardless is a true market leader, and the breadth of payments it accepts means it’s ideal for recurring payments. For this reason, we’re confident to declare GoCardless the best payment gateway for recurring billing.

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.