If you’re a subscription, SaaS and recurring billing merchant, there’s no doubt customer retention and churn are top of mind. Gaining loyal customers is imperative to a healthy business, but did you know that who you choose to process payments can impact how long your customers stick around?
An ineffective and clunky payments processing operation is not just a drag on the back office. It’s a threat to customer retention. Knowing what to evaluate in a payment processing partner aids in reducing unnecessary churn and keeping your customers happy.
Onboarding
Does your payment processor offer thorough onboarding and seamless integration? A smooth setup ensures less problem later, and the less problems you have, the less problems your customers have. Traditional acquirers and emerging alternative payments providers have different underwriting processes. Some are more streamlined than others and some provide more technical support throughout the process. Can you get instantly approved? Are they responsive to customer service requests? These are all important questions to ask when looking at payment processor options. While the onboarding process may seem disconnected from customer retention, it’s not. If you onboarding experience is slow, clunky, awkward and frustrating, it may signal what’s to come in terms of customer experience during the payment process.
Customer Experience
What is it like to make a purchase on your website? Is the checkout/payment process clunky, slow, confusing or too complicated? Online studies report that the average online shopping cart abandonment rate is at a staggering 69.23%. If consumers are not happy with your checkout process, they are going to bail. This is a critical statistic for recurring merchants whose #1 goal is reducing unnecessary churn. Don’t let your payment processor be the reason your subscription, SaaS and recurring customers are churning.
Flexibility
Does your payment processor offer flexible, scalable, agile and adaptable technologies that integrate well with your systems? There are multiple connectivity options available, including secure payments page, batch processing, virtual terminals, and APIs. You need to understand which is the best fit for your systems and which will integrate well with your business and merchant accounts. Merchants also need to keep an eye toward the future and consider how their payment processing operation as a whole will need to adapt to meet consumer needs – and the business needs – as the company grows. The ability to offer multiple payment options is essential to keeping customers happy and reducing unnecessary churn.
Compliance
This one is a big one for all merchants, but especially merchants that accept recurring payments. Working with a PCI-DSS Compliant processor is mandatory. Non-compliance open you up to infinite risk as well as fines and penalties. Payment processing solutions that do not protect sensitive cardholder data introduce risk to the entire payments equation. With recurring payments, a cardholder’s data is kept on file. In order to protect this information, the merchant needs a secure payment gateway and tokenization to protect the data from hackers and fraud. Tokenization is key because it allows the data to be stored in a non-reversible tokenized format. In the event of a breach, the hackers would only be able to obtain the token representing the cardholder data rather than the actual cardholder data itself. As technology advances, there may be more ways to protect sensitive data and you should ensure your processor and/or gateway are agile enough to move in-step with emerging data protection technologies and compliance regulations.
Funding
Does your payment processor offer funding that meets your timeline? As a merchant receiving deposits on your schedule ensures you can keep operations running efficiently, including payroll, inventory and other necessary costs. Some payment processors fund according to their own timeline, leaving merchants hanging and sometimes causing operations to grind to a halt. It’s not a situation any merchant wants to find themselves in, but it can happen. What do you tell customers who are trying to make a purchase but can’t because you haven’t been able to restock due to delayed funding? How do you think it impacts customer loyalty when people with a customer service issue face 20 minute wait times because you had to cut customer support staff? Your payment processor should partner with you to do what’s right for your business.
Subscription, SaaS and recurring billing merchants have several options when it comes to deciding on a payment processing system. There are subscription management services that are built on top of 3rd party gateways and merchant accounts, payment gateways that offer subscription management tools and hybrids in between. The most important thing is ensuring that your recurring billing happens without a glitch and in a way that is satisfactory to the customer – and to you. Recurring billing can get tricky and opting for the wrong processor can hamper your efforts of reducing unnecessary churn. Find a processor that you can trust and that can act as a partner in achieving both payments and business goals.
