Hold Onto Your Subscribers and Improve Your Customer Experience While Transitioning From One Payment Provider to Another

By Erich Litch On Jan 13, 2020

It’s no longer breaking news that subscriptions are on the rise, and that growth will only continue. Look at your own family for example; do you know how many subscriptions you currently have? Sure Netflix, Spotify, and a few others come right to mind, but most households have at least a handful more that they pay for each month, as an automatic recurring charge, without giving them much thought.

As a marketer of a company selling subscriptions, you want to maintain a frictionless customer experience, to ensure these subscriptions continue to generate revenue.

What if you wanted to make a technology change or switch to another payment provider that can better serve your business, by increasing conversion, authorization or renewal rates, or improve the overall purchase experience? How many subscribers would you lose, if you had to reach out to them and collect their payment data again? To reduce churn, you want all changes behind the scenes to remain that way and transition seamlessly from one provider to the other, while having your customers just focused on using and enjoying your service.

Once you and your team have determined another payment provider would better serve your growing business, questions start to arise. Who owns the highly sensitive payment details of your customers? Where is the data being stored? How can it all seamlessly be transferred to your new provider? You will most likely not do this on your own, as a marketer or sales professional. You will want to involve a multi-functional team: the legal Counselor, your Chief Information Officer, Customer Support, and clearly, whoever is in charge of payments to work together on this project. However, it’s good to understand the overall process, and know what you need help with from your colleagues.

Ownership

Despite what you may think, payment data is not owned by anyone. This data is only stored securely, with the customer’s permission to use it, and neither the payment processors nor the merchants own it, in spite of any contract or terms and conditions that are in place. What you’ll need to focus on is, “payment data transfer”.

Storage

Card payment data is stored by PCI compliant companies, requiring transfer documents to move to another PCI compliant company. An option for the merchants selling subscriptions is to have agreements in place for the credit card data to be stored in vaults, thus ensuring card data portability, regardless of the payment providers.

In the case of other payment methods, such as Direct debit and PayPal, things are slightly different, as data is linked to the customer’s bank account or a PayPal account.

Transfer

Let’s look at how you can successfully transfer your customer’s payment data, in a secure and timely manner. Card data transfer requires a formal request to your current provider to start the process, demands the highest level of data verification, and signed documentation from all parties prior to initiating the transfer. Your new payment provider should be able to evaluate the risk associated with your subscriptions, by looking at statements from the current processor, including refunds, chargeback rates, etc.

Remember this is highly sensitive data, so a secure environment must be in place for the data transfer to happen. Once the transfer is complete, you want to ensure the data has been mapped correctly in the new system. This can be done through a series of tests confirming data consistency and validation.

Keep in mind, such a transfer takes some time, two to six weeks is reasonable and incurs a cost, of up to roughly 80 hours worth of professional services. Also, be sure to keep an eye on renewals that may be past due at the time of the data transfer. It’s important none of your subscribers slip through the cracks.

Marketers Ease the Transition

What if your current payment provider refuses to make the transfer? Yes, it happens, more often than you may think! As a marketer or person in-charge of online sales, what can you do to help? First and foremost, you can start by directing new acquisition links (behind the “buy now button”) to your new provider of choice. This will take care of all new business.

Regarding existing clients that need to renew their subscriptions, you can initiate Marketing campaigns for early renewal, again with “behind the scenes” links to your new provider. As with any other campaign, you need to be consistent across channels, and make sure you test and see what works best. There is always some churn, so prepare to reclaim customers by offering discounts for early renewal, and to do follow-ups. Also, consider in-app or in-platform messages to help promote the switch.

Bottom Line

The most important thing to remember in growing your subscription business is maintaining a positive customer experience, and as a result, you will have solid customer retention. The commerce and payments piece is an important part of this – since it is all about how you monetize your products and services, and that recurring transactions are frictionless.

When you do need to switch payment providers, for whatever reason, the goal is to make the transition for your customers simple, efficient and as seamless as possible. With this understanding, you will keep churn to a minimum and continue to deliver high-quality service overall.

Going forward, anytime you are selecting a new payment provider, be sure your team establishes upfront the terms for the ability to transfer payment data. This will simplify the transition in the future.

Now you can feel confident to make the necessary changes you desire to manage and grow your business, without hesitation or disruption to your existing subscribers and revenue stream.