Recurly, a startup that makes it easy for other companies to manage their subscription billing, has released a payment gateway designed specifically to handle the unique requirements of recurring billing.
Recurly’s service allows businesses to quickly implement a subscription billing system, handling tasks like credit card number storage (it also supports integration with financial software like QuickBooks).
As President Dan Burkhart explains, there is turbulence in the subscription payments space because 5 to 15 percent of credit cards fail monthly in subscription billings. In many instances, credit card errors result directly in unwanted customer churn, which is extremely costly for subscription businesses with recurring revenue streams.
With Recurly operating its own payments gateway, the startup can be integrated directly with payment processers’ backends and more efficiently manage recurring transactions.
In addition, Recurly provides premium customer retention reports for each Recurly payment gateway customer. Unlike most payment gateways, which are designed to process one-time transactions, Recurly’s payment gateway helps businesses optimize their customer retention rates, and minimize customer churn.
Recurly is also moving towards a different pricing model that charges 1.25 percent of billable invoice amounts and $0.10 per transaction, which includes use of the payments gateway. Burkhart says that the company is moving away from a tiered pricing structure based on transaction volume. Additionally, the gateway only supports U.S. merchants but Recurly will soon add support for international companies.