More and more businesses are starting to look at recurring revenue and subscriptions as critical business models. They create a predictable revenue stream and less time has to be put in to generating and maintaining customer relationships. Furthermore, for the customer, it takes the hassle out of purchasing a product or service that they buy/use on a regular basis. For businesses operating with a subscription model, there are numerous differences to the ways that they handle payments. A critical aspect is their collections strategy. To discuss these differences and provide advice on maximising your collections efficiency, we have interviewed our Operations Manager, Pablo Clark.

So, Pablo, from your experience, what are some issues that come with recurring business models?

I often find that the length of time it takes to complete a payment run can be an issue. We have come across businesses whose payment cycles with their incumbent providers took many hours to complete. However, after switching to, the same runs took minutes. It’s not that they had loads of customers to collect against, their providers just limited the number of transactions they could submit per second. This meant that they had lengthy payment runs that caused them to miss out on those sweet spots for collections, leading to a drop in collection rates.

Furthermore, by making payment runs as quick as possible, significant efficiencies can be gained. Our clients are able to get down to real work as soon as their day starts as they know exactly which transactions were successful or not first thing in the morning. We are running well below our platform capacity and do not need to place harsh throughput restrictions on our customers. Through our cloud-based infrastructure and advanced architecture, provided in partnership with Armor, we can spin up additional throughput capacity within minutes if ever required.

When you say payment sweet spots, what do you mean by this?

Payment sweet spots entail performing continuous payment authority (CPA) runs at certain times that dramatically increase authorisation rates. If the payment fails on the first collection attempt, the likelihood of achieving a successful collection later in the day is typically reduced. Businesses are able to find the best times in the month by understanding their customers. Once we help our clients to work this out, we can automate their entire system, so they won’t ever have to worry about collection times.

Another element that inhibits collection efficiency is the generic decline codes they receive from some providers. These generic response codes don’t really inform the client about why a transaction was declined. Without knowing the reason for a decline, some businesses will keep trying until it’s successful. This is highly inefficient, and they may even be processing against a decline where there is no chance of the payment ever being collected.

How does the platform help to solve these issues?

To solve the issue of generic decline codes, we provide full issuer response codes and have a high-level list of over 100 responses in our system. You can find out exactly why the transaction was rejected in real-time and perform actions based on that. Through our system of soft, medium and hard declines our customers are able to take the best approach to collecting the funds from a customer. If they receive a soft decline (for example: insufficient funds), they know that they have a chance of receiving the funds in the next payment run. However, if they receive a hard decline (for example: a customer asking their bank not to allow any more payments), the funds will never be collected unless the customer is contacted. We can even get better insights into who the ‘tricky’ customers are and block their cards from making future purchases.

Our consultative reporting is also a key aspect of helping to improve our clients’ efficiency. When a customer goes live with us, we begin monthly, in-depth decline analyses. We look at all of the processing they’ve done through our platform and provide a break down of all the response codes they received on both an issuer and gateway level. They are then given a whole host of recommendations on the best practice to cut down on their declines. We provide this for all of our customers as we believe that it’s truly the best way to maximise their processing efficiency.

What are some other ways we help to improve performance?

Account Updater is a tool that we provide to help streamline payments. When a customer’s card is expired, lost or stolen, it allows our customers to query Visa and Mastercard for the updated details directly. This is beneficial for businesses because they no longer have to contact the customer for their details. From a consumer’s viewpoint, they won’t have to do anything themselves, resulting in a frictionless customer experience. By updating the card without requiring any action, businesses no longer have to bother their customers. Using the platform, we proactively do this on the business’s behalf. In some sectors, minimising engagement with the customer is key. Reaching out to update their details could trigger an action from the customer to shop around for better prices and alternatives.

How does regulation come into play?

For subscription businesses, there are certain industry dependant regulations. According to the FCA, businesses with certain Merchant Category Codes in the financial services sector can process a maximum of three CPA attempts against a customer per calendar month. After two attempts they must engage with the customer and make sure that they aren’t in any financial distress.

There are also fines that can be passed on to businesses if they continue to collect against a customer’s card after they have instructed their bank to halt all future payments. Many businesses unknowingly keep making CPA attempts. By making use of our detailed issuer response codes and automated system, we save our customers from incurring these fines. 

How do we tailor the process to individual clients?

From the on-boarding process, we ask them about how their CPAs are carried out and what their logic is around their runs. We take a personalised approach, providing recommendations about sector knowledge and about what others in the industry, and across our portfolio are doing. From the early stages we share knowledge, feeding eventually into benchmark reports. Each sector will have slightly different collection rates. Running sector reports allows us to see how customers compare to others in the sector on an authorisation basis. We may see that one business has a much higher or lower success rate. In many cases, we are able to find some key differences and provide recommendations to customers we feel could improve their overall collection rates by making a few small tweaks and improvements.

By forming partnerships with our customers to give a consultative experience, and providing tools to help automate the process, we are able to create highly efficient collections strategies for our clients.

Any final thoughts Pablo?

The majority of payment gateways look to maximise their transaction numbers. What this means is that our competitors simply want more transactions to be processed. At, our mantra is to make our customers as efficient as possible and this often leads to reducing the number of transactions processed. We love seeing our customers happy, efficient and cost-effective across their entire payment collection strategies.