How to Select a Quality Subscription Payment Solution Partner
Running a subscription business can be rewarding. You generate a steady stream of income that hits your bank account daily, monthly, quarterly, or annually with each new client you bring to the table.
Although it’s important to bring in new customers, keeping your existing customers is even more effective for generating revenue and reducing costs. Despite investing in new products, services, and features to retain customers, it’s likely you are still losing customers to inefficiencies in your payment processing solution.
The simple fact is that credential-on-file merchants need solutions they can integrate into their systems that reduce decline and subscriber churn rates in the process. Unless you have an in-house payment expert or payment team, it’s hard to know how much money is being left on the table due to payment inefficiencies. Even if your current system ‘gets the job done’ it’s worth regularly reviewing your partnership and needs given the rapid pace of development in the payment space. Don’t be fooled by marketing fluff, get the facts for yourself.
Features Your Payment Solution Should Have
As a subscription business, your payment processing system needs to be able to ebb and flow with the types of transactions, payment methods, regions, and processors your business supports. That means you need a system that actively works to avoid declines, one that provides proper ECI codes, Network Transaction IDs, as well as Network Tokens and one that offers advanced decline retry management.
Legacy options and ‘One Size Fits All’ providers simply don’t offer these types of solutions.
As you shop for the best payment solution for your business, it's worth doing your research and finding a solution that meets all your needs. In particular, look for the features we’ve detailed below.
As a business owner, it’s important that you employ varying security measures to protect your customers and their data. That’s where network tokenization comes in. This change in the payment industry is so large that Visa and MasterCard are actually incentivizing merchants to switch to network tokens by providing a discount on fees for transactions processed with Network Tokens.
When you process a transaction, you may do so using the customer’s primary account number (PAN). That’s the 15- or 16-digit card number the customer inputs into your checkout form. The problem is that hackers may be able to get their hands on this data and exploit your business and unknowing card members.
Network tokenization solves this problem by turning the customer’s PAN into a token for transmission purposes. This ensures that even if a hacker intercepts the data, they can’t use it, since network tokens can only be used by the businesses that create them.
In addition to the security that network tokenization provides, there’s a cost benefit as well since Visa and Mastercard are now charging an additional 9bps for every transaction that doesn’t use tokenization.
Note: Pinless Debit routing cannot be completed with the Network token; your billing provider must be PCI Level 1 compliant and be able to manage this routing on your behalf.
Batch and Real-Time Account Updater
When your payment processing solution creates tokens for customer payments, those tokens are stored in your database. That way, you can use them to process future transactions.
There’s one problem with this system — depending on your implementation, when credit card information changes, your tokens are no longer accurate.
Batch and real-time account updaters give you the ability to update multiple tokens at once or update tokens in real time as your system processes payments. Using a billing provider that will abstract token data and provide a single payment method ID the merchant can manage without undue risk or required updates. This means you don’t have to worry about excessive declines as a result of incorrect token data, nor do you have to update account tokens on a one-by-one basis.
Direct Processor Integration Into Recurring Processing Platforms
Gateways can get expensive. These systems create a link between the merchant or billing provider and the payment processor and typically come with unavoidable monthly and per-transaction fees. They also don’t always pass all the necessary transaction information along to the processors and banks and rarely maintain full integrations to their full suite of processors, both of which will increase the possibility of a false decline.
The good news is that you can get around this additional cost and the false declines.
Some recurring processing platforms, like Revolv3, offer direct processor integrations. With direct processor integration, you don’t need a gateway, and you can cut the added cost of using one off your balance sheet while you add the lift from more approved transactions and less churn.
Proper ECI Codes
The Electronic Commerce Indicator (ECI) is a tool payment processors and issuing banks use to ensure transactions are placed accurately. ECI codes flag transactions as one-time, recurring, or installment payments, and they make sure the transactions meet security requirements related to the transaction type in combination with the merchant account, NetworkTransactionID, and associated data.
If the payment processing system uses improper ECI codes, you could have to deal with increased declines because the ECI codes don’t match the transaction type or the corresponding data causes risk alerts at the issuing bank. This could decrease customer sign-ups and increase customer churn, cutting into your top-line revenue and bottom-line earnings.
Network Transaction ID Compliance
Network transaction identifiers (NTIs) give issuers the ability to use stored data from original transactions to validate subsequent transactions. When used properly, NTIs can increase approval rates, leading to increased revenue and improved trust with Networks and Issuers.
On the other hand, NTIs must be stored, or vaulted, properly. If not, the data isn’t in compliance, which can lead to an increasing decline rate and customer churn. Ultimately, a lack of NTI compliance could cost you meaningful revenue.
BIN Account Range Analytics
BIN is an acronym for Bank Identification Number and is currently defined as the first 6 digits of a card number. Each BIN can have one-to-many Account Ranges (currently first 9 digits of the card) that provide more accurate data at the card product level. For example if your business has a high population of debit cards, the Account Range can tell which pin-less debit networks are available for processing that card. This can further reduce cost and increase approvals, but must be monitored at the BIN/Account Range Level because each BIN or Account Range can perform differently across a variety of processors given a variety of merchant and issuer data.
Quality BIN/Account Range analytics help to ensure your payment processing service is following the most efficient transaction processing for your consumer base. This helps avoid declined transactions and high involuntary customer churn rates.
That’s why it’s important to use a payment processing solution that offers quality BIN account range analytics and gives you a way to keep declines to a minimum.
Decline Retry Management Based on Various Factors
Excessive declines can be a significant issue for your business for a few reasons:
- Cost. Most payment processing solutions charge a fee every time you attempt a payment, whether it approves or declines. Excessive declines mean you pay excessive fees without generating revenue and can further incur fines from the payment Networks
- Customer churn. Excessive declines can also be frustrating for your customer, which could lead to a high customer churn rate through voluntary or even increase involuntary churn if the customer becomes too frustrated to continue.
- Processing relationship. Some payment processors may increase your fees or even end their relationship with you if your decline rate becomes excessive so strategic retries are imperative to maintaining high trust with the payment ecosystem.
A quality payment processing solution incorporates state-of-the-art algorithms and technologies to manage decline retries based on several different factors. That means you won’t have to deal with the added fees or headaches that come with brute force retries.
Choose Revolv3 for Your Payment Processing Needs
If you’re looking for the best subscription management and payment processing solution for subscription-based businesses, look no further — Revolv3 is it. Revolv3 is breaking the mold in payment processing by offering all the features mentioned above and more.
Revolv3 helps your business succeed by taking advantage of dynamic routing to increase your approval rates and providing detailed analytics to help you grow your business. Not to mention, the company doesn’t charge a fee for declined transactions, so Revolv3 has a vested interest in helping ensure your transactions are approved. Set up your free consultation today!
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