Businesses that sell subscription products and services are ideally positioned to leverage the power of recurring billing. Many subscription businesses can’t operate without this type of solution.
However, choosing which subscription billing solution to use isn’t always easy, especially if you’re new to e-commerce. Here are seven reasons why you should choose a billing solution over a payment gateway for your subscription business.
1: Higher Customer Satisfaction
A billing solution allows customers to have an ongoing relationship with your company, providing opportunities for upsells and downsells. With a payment gateway, there is no way of reaching out or interacting with your customer in between billing cycles.
This means missed opportunities in getting those customers more attached and engaged with your brand. With a billing solution, you can accept payments from any credit card using Stripe or Braintree.
2: Larger Customer Base
You don’t need to worry about PCI compliance issues because you are not storing any sensitive data on your servers. In addition, you can set up recurring subscriptions with ease. With a payment gateway, you will be limited to accepting payments only through that particular gateway and it may be difficult to set up recurring billing at all.
3: Minimize Risk
With your billing software, you can avoid having to pay third-party subscription gateway fees. You also maintain full control over customer data and payment processes, providing more security than other solutions.
This is especially important if you’re processing sensitive information such as credit card numbers or social security numbers. A potential hacker could access your payment gateway account through a single point of entry
However, with an in-house solution, they would need to hack into each site separately—making it much harder to steal personal information. This is why many banks use their systems rather than those provided by third parties; it’s simply safer that way.
4: Save Money with Recurring Billing Solutions
It’s no secret that running an e-commerce business can be expensive. And while most payment gateways offer additional features such as coupon codes and enhanced security, they typically charge extra fees on top of their standard transaction rates.
With billing solutions, recurring revenue is already built into your monthly price, meaning you don’t have to worry about pricing yourself out of customers or losing money in other areas of your business.
5: No credit card fees
A payment gateway is going to charge you 2.9-3.9% plus $0.30-$0.50 per transaction, depending on your company’s volume and business model (subscription vs regular sales).
This can add up over time, but with a billing solution that is included in your monthly or annual plan cost. You won’t have these additional expenses every month. You will only have one fee of less than $10 per month. This can save you thousands each year!
6: Lower Costs
If you’re using a payment gateway, there may be an additional cost involved that isn’t necessary if you choose an integrated billing solution. Plus, since most billing and payment solutions are combined into one platform, merchants get all of our industry-leading features without an additional fee.
7: Faster Payments
When you use a payment gateway, your customers have to wait up to two days before their funds are transferred into your account. With a billing solution, one can deposit funds directly into your bank account within 24 hours. Not only does it save time on both ends, but it also means less money tied up in working capital as well as lower processing fees for your business.
Whether you’re creating an e-commerce website that processes credit cards or starting a subscription-based business in your local market. And it’s important to choose the best billing solution for your needs.
By eliminating these key features from your business, you will find yourself in a more difficult position than necessary. So when you’re choosing between an integrated payment gateway and an all-in-one billing solution, always remember these seven factors.