As the world moves into the digital era, paper invoicing is becoming less common for SaaS companies. Instead, most companies now offer their customers a range of online choices when they’re signing up. So, what are the leading online subscription payment processing options?
– Credit and debit cards
– Direct debits
– Digital wallets
– Alternative payment methods
Card schemes
Debit and credit card schemes such as Visa or Mastercard offer your customers a recognised and trusted way to pay. They provide a seamless experience to your customers who can usually fill in their payment details and complete a purchase in just one click, and the payment is processed instantly.
With card schemes, you can let customers complete separate transactions based on their subscription plan (paying a set amount each month, for instance) or work with a processor who can help you keep card details on file and automate payments. Often, these payment processors will let you store multiple cards on file, which can help prevent involuntary churn.
Direct debit
Direct debits allow you to take regular payments from your customer’s bank account based on a pre-approved agreement. This agreement is called a mandate. To set up a mandate, customers need to complete a form that permits you to take money from their accounts. In Europe, the most popular direct debit method is SEPA Direct Debit.
Direct debits offer both you and your customers flexibility and security. They are relatively simple to set up and manage. Direct debit payments can also be reattempted if they fail. And because people don’t often change their bank accounts, they reduce the risk of involuntary churn.
Wallets
Some digital wallets act as electronic cards that people can use to complete transactions. The card connects to the individual’s bank account through debit or credit cards. Apple Pay and Google Pay both offer this service. PayPal is also a type of wallet that supports subscription payments, though not all wallets do.
Alternative payment methods
Alternative payment methods include a range of different payment methods. In Europe, many local bank transfer methods support recurring payments for businesses. This includes France’s Cartes Bancaires and Giropay in Germany. Some recurring payments that use these European payment methods are operated via the SEPA Direct Debit scheme.
