How do you ensure subscription payments always go through?

The subscription model relies on ongoing delivery of a service or product — and ongoing payments from your customer. But sometimes, that payment flow is disrupted. The reasons vary: a mistake, insufficient funds, or a more structural issue. As a provider, you need to strike a careful balance between giving customers flexibility and taking action when needed. It’s also worth revisiting your payment methods. How do you reduce failed payments while keeping customers on board?

The average household has around 15 active subscriptions*. Most of these are paid monthly via direct debit. These so-called recurring payments can occasionally fail — for example due to insufficient balance or a maxed-out credit card. Other causes include expired or invalid payment details, or a block on payments to a specific account number. And sometimes, the customer themselves actively reverses the transaction.

What’s the best day to collect payments?

When is the ideal time to collect a payment — so the risk of failure due to insufficient funds is as low as possible? The answer: right after your customer’s income has been deposited. If students are a key target group, it’s unwise to collect on the 19th of the month when student grants are paid out on the 23rd. The same goes for employees and benefit recipients. Can you tailor this to everyone? Not easily — unless you let customers decide for themselves. Offer them the option to choose their own collection date. It’s a customer-friendly gesture that significantly reduces failed payments. Set up a self-service portal where customers can update their payment preferences and details. You can even provide a direct payment link for quick recovery when a payment fails — making the process smooth and stress-free.

Sometimes payments fail due to a block on a specific IBAN. If a customer disagrees with a recurring debit, they can instruct their bank to block payments to a certain account. If that account belongs to a Payment Service Provider like Buckaroo, the block might also affect other transactions routed through the same account. The block must be removed before new payments can be processed successfully.

How should you structure your reminder flow?

If a payment still doesn’t go through, you have several options. One common approach is to reattempt the debit a few days later. If that fails too, the customer enters a reminder flow. You decide how this flow looks — and what tone you want to use. How soon do you send a reminder? Are you friendly, or do you take a firmer approach? That depends not only on your brand voice, but also on what you’re offering. For example: streaming services or news platforms can simply suspend access when a payment fails. But a company renting out solar panels likely wants to avoid having to physically uninstall them.

As a dedicated payment partner, Buckaroo has deep experience in preventing and reducing failed payments. We offer automated payment reminders and give your customers convenient alternative payment options. We also help detect recurring issues — even fraudulent behaviour — by analysing patterns in failed payments. Together with your team, we’ll design a custom reminder flow. We can even A/B test different approaches: one group gets a friendly nudge, the other a firmer tone. What works best? We have the data and expertise to fine-tune your communication strategy based on your sector and customer segments.

Nibud Research 2021