Innovative Payments for Subscription Services
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Over the past 8 years, subscription services have grown by more than 350%. Due to guaranteed recurring revenue, the industry is indeed a lucrative one. Partnering with an experienced and reliable merchant provider is key to keeping cash flow positive without interruptions. Below we will analyze how a subscription merchant account can assist with business growth.
Who Can Benefit from a Subscription Merchant Account?
There are two kinds of businesses that can benefit from a subscription service merchant account. One is selling recurring access to digital or streaming services. Think Hulu, Match, or Lifelock here. There are also businesses selling physical products on a recurring aspect. BirchBox, Blue Apron, and Winc are prime examples in this space. The recurring process usually starts after the first initial payment and then billed regularly at a specific duration until the customer stops using that product or service or a contract term expires.
Process of Applying for a Payment Solution
To kick off the application process, find a reliable recurring payment provider such as Payment Savvy. Discuss your payment needs and future goals and make sure the processor can easily meet your goals. Once you have the perfect custom payment solutions built, expect to provide documentation on your entity for underwriting review. This can include incorporation documentation, EIN verification, business bank statements, and a copy of the business owners’ driver’s license, among other items.
Once your merchant application is approved, your merchant provider will help set up a payment gateway and establish a recurring payment form on your website. This allows for seamless backend integration, prompts real-time authorizations, and ensures quick and timely subscription service funds.
Advantages of a Subscription Merchant Account
Unlike many business models, companies with subscription services have the ability to predict revenue easily. For example, if you have 1,000 active recurring subscriptions prices at $19.95 each, it is not a stretch to predict your revenue next month stay steady around the $20k mark. This gives you a high level of financial stability.
Another benefit of a subscription merchant account is that it fosters better relationships with consumers. Not to mention, you can gain insight into areas needing improvement in the service delivery process.
Find a Merchant Account that Fits
The key to maximizing profits and reducing headaches is to choose an experienced and advanced subscription service merchant account provider. Review all contract terms, rates, and fees with a critical eye. Question any item you are not fully comfortable with and make sure the service best fits your budget. It is also recommended to demo any products you are interested in and ask about security features. Once you have the right payment partner for your business, you can be off to the races and collecting revenue through your site.