7 best subscription payment gateways for businesses in the UK

Industries such as gyms and wellness centres, food and drink entities, and product delivery services depend heavily on the membership/subscription model. For these businesses, it’s important to partner with a subscription payment gateway that seamlessly handles recurring billing. Recurring payment gateways ensure that enterprises can automate their periodic subscriptions and focus on other aspects of their business.

In this post, we cover the ins and outs of subscription payment gateways, the benefits of recurring payment services, and the players in the market - both dominant and emerging.

What are subscription payments?

Central to subscription-based businesses is a subscription payment system, wherein customers consent to recurring charges in return for ongoing service or product delivery. Consider your preferred gym membership or meal box delivery service; these services implement a monthly fee structure without necessitating further payment authorisation following the initial setup.

Key features of payment gateway subscription

Subscription payment gateways provide essential features that simplify recurring invoicing, enhance customer retention, and guarantee a seamless experience for businesses. The following are some essential features:

●  Preset recurring billing: automated recurring billing ensures consistent cash flow by automatically charging customers based on a regular schedule (weekly, monthly, or annually) without manual intervention.

●  Dunning management: utilises automatic retries and reminders to manage rejected payments, thereby reducing churn and recovering lost revenue.​​

●  Prorated billing: offers flexibility for evolving customer requirements by adjusting billing when customers upgrade, downgrade, or suspend subscriptions mid-cycle.

●  Trial periods and discounts: Enables businesses to provide free trials or introductory pricing, improving customer acquisition and retention.​

●  Security and compliance: Offers secure payment processing that adheres to regulatory requirements of PCI-DSS and GDPR, thereby safeguarding sensitive consumer information.

●  Customisable invoicing: Allows businesses to personalise invoices by incorporating branding elements, discounts, and personalised messaging to improve the customer experience.

How to set up subscription payments?

Initiating subscription payments necessitates the integration of a recurring payment gateway into your platform. A sequential guide is given below for ease of implementation:

●  Choose a suitable payment gateway: select a payment gateway that facilitates subscription billing. Certain platforms focus on recurring payments, including sophisticated features such as dunning management and customer communication tools.

●  Establish pricing structures: establish fixed or variable pricing plans that correspond with your business model. This is essential for sectors with varied client requirements, such as fitness centres providing multiple membership tiers.

●  Automate billing: make sure the platform autonomously dispatches invoices and payment confirmations to consumers following each billing cycle.

●  Ensure adherence to statutory mandates: subscription payment gateways must comply with regulatory mandates, including PCI DSS, for the secure management of payment card information (if you are taking payments via card)..

What is recurring payment processing?

Recurring payment processing streamlines the billing cycle by capturing and securely storing payment information, subsequently utilising that data to charge customers at regular intervals. After a customer subscribes, they will be billed at regular intervals until they decide to cancel their subscription.

How does it work?

The process initiates when a customer subscribes to a service, usually via a website or application. The payment details, whether credit or debit card, are securely stored by the payment gateway, facilitating future transactions without the need for manual intervention. The payment gateway streamlines each billing cycle and ensures the transfer of funds to the merchant’s account while maintaining data security and adhering to PCI compliance standards.

Recurring payment services can be segregated into the following three categories:

Fixed recurring payments: This model entails the charging of a predetermined amount to consumers at regular intervals, such as monthly or annually. It is frequently employed by streaming services, gyms, and meal delivery programs, where the cost remains consistent throughout the subscription period. For example, a fitness membership may be accompanied by a fixed monthly charge.​

Variable recurring payments: In this case, the charge may fluctuate in accordance with consumption or usage. This is a common practice in sectors such as telecommunications or utilities, where customers are charged based on their actual consumption. This model may be implemented by cloud storage services or transaction-based SaaS platforms.​

Hybrid model: Certain organisations implement a combination of fixed and variable payments. For instance, a primary subscription fee may be accompanied by additional fees for supplementary features or services. This is a prevalent practice in eCommerce subscriptions, where customers are required to pay a fixed monthly fee and incur extra charges for add-on features.

7 best subscription payment gateways

The recurring payment services market is expected to surpass $16 billion by 2023, recording a compound annual growth rate (CAGR) of 4.2% between 2023-2033. This makes way for strong players to consolidate their positions in the market, while new entrants enter with robust solutions to make their presence felt.

Here’s our shortlisted subscription payment gateways that are controlling the UK market:

Wonderful

Wonderful provides a customised solution for companies seeking an easy and secure recurring payment gateway. It facilitates automated recurring billing, positioning it as an excellent option for gyms, wellness centres, and delivery services. Wonderful offers a versatile platform that includes robust security features and seamless WooCommerce subscription gateway integration. Using open banking technology to minimise failed payments and invoice integration with accountancy software such as Xero, Wonderful equips businesses with the essential tools for seamless subscription management.

Chargebee

Chargebee is a subscription payment gateway tailored for businesses on a growth curve. It provides customisable price options that may be adjusted to meet your company's needs, including usage-based, hybrid, and fixed subscriptions. Chargebee distinguishes itself with its multi-currency compatibility, customisable checkout pages, and prorated billing features. It also easily integrates with several WooCommerce subscription payment gateways, including PayPal, Stripe, and Braintree.

Adyen

Adyen is a global payment platform renowned for its ability to manage complex subscription arrangements. Its one-click payment simplifies the recurring payment process for returning consumers. Adyen provides organisations with a variety of services, such as automated retries for unsuccessful transactions, multi-currency compatibility, and fraud prevention measures. Its scalability makes it ideal for enterprises providing worldwide subscriptions.

Paddle

Dually headquartered in London and New York, Paddle serves as a robust payment platform tailored for SaaS companies and digital product providers. It manages all aspects of recurring billing and tax compliance, making it especially beneficial to multinational organisations. Paddle streamlines the dunning process, facilitates a variety of global payment methods, and offers customisable payment gateway subscriptions. Its comprehensive solutions minimise the necessity for various third-party integrations.

PayPal

PayPal is a reputable payment gateway for subscriptions that provides dependable recurring payment services, particularly for small and mid-sized businesses. It facilitates seamless integration with WooCommerce, Shopify, and other leading eCommerce platforms. PayPal’s multi-currency acceptance and growing global user base make it a truly global player. It allows businesses to establish automatic payments, incorporating features such as customisable billing cycles and subscription management.

Stripe

Stripe, often considered one of the most developer-friendly payment gateways for subscription businesses, has strong recurring billing capabilities. It enables organisations to create variable billing cycles, provide trial periods, and automate client invoicing. Stripe also offers additional tools like dunning management (to recover failed payments), detailed analytics, and multi-currency compatibility. The platform's seamless connection with WooCommerce and other eCommerce systems makes it a great choice for firms seeking flexibility.

Braintree

Braintree, a subsidiary of PayPal, is a robust recurring payment gateway that comes with strong API support. This platform offers flexibility, accommodating both simple and multi-layered subscription models. Braintree offers features such as automatic billing, advanced fraud protection, and support for various currencies. It seamlessly integrates several eCommerce platforms, facilitating the management of subscriptions across multiple channels.

Can WooCommerce payment gateways handle subscriptions?

Absolutely. WooCommerce is as an excellent platform for managing subscription-based businesses, particularly with the powerful WooCommerce Subscriptions extension. This tool seamlessly connects with a variety of recurring payment gateways, empowering businesses to effortlessly automate their recurring billing processes. Irrespective of whether you run a gym and wellness centre or subscription box service, WooCommerce is equipped to manage every facet of subscription management with ease.

Key features of the WooCommerce payment gateway for subscriptions:

Multiple payment gateways: WooCommerce Subscriptions offer support for various subscription payment gateways, including Wonderful, Stripe, PayPal, Authorize.net, and others, providing flexibility for you and your customers. This allows businesses to provide a diverse array of payment options, enhancing the customer experience and minimising friction during the checkout process.​

Customisable billing options: You can establish tailored billing cycles (monthly, quarterly, and annually) and provide various subscription packages. A fitness studio may provide monthly memberships in addition to annual subscriptions that include a discount.​

Automated recurring billing: Upon subscription, the system charges customers automatically at the designated intervals, removing the necessity for manual payment processing. WooCommerce Subscriptions manages payment retries for failed transactions, guaranteeing uninterrupted service without the need for manual oversight.​

Free trials and sign-up charges: WooCommerce enables businesses to provide free trials and implement sign-up fees for subscription services. This approach is advantageous for organisations providing services that allow customers to experience offerings before making a full commitment, such as meal delivery services or SaaS platforms.

Prorated billing and upgrades/downgrades: Organisations utilising WooCommerce can implement prorated billing, enabling clients to adjust their plans by upgrading or downgrading during the billing cycle. This adaptability is essential for maintaining customer loyalty and enhancing the overall user experience.​

Effortless integration with the WooCommerce store: As WooCommerce subscriptions are an integral component of the WooCommerce ecosystem, they integrate seamlessly with your current eCommerce store. Regardless of whether you are offering physical products or digital services, both subscription management and product inventory are efficiently managed in a single location.

WooCommerce Subscriptions stands out as a remarkable solution for businesses eager to embrace subscription models, offering several utility tools for billing, payment processing, and customer management. Its compatibility with a wide range of subscription payment gateways allows for seamless adaptability across various industries, fostering effortless operations and elevating customer satisfaction.

The road ahead

Recurring payment gateway is a fast-growing industry that is embracing technological breakthroughs to pave its future path. The following emerging trends mark the revolution that’s further fuelling the industry's growth trajectory:

●  AI-driven personalisation: The power of artificial intelligence will continue to shape subscription offers, customising them to align with customer behaviour, preferences, and usage patterns. This paves the way for tailored pricing models and enriching customer experiences.​

●  Seamless multi-currency support: As global eCommerce expands, subscription payment gateways are poised to enhance their multi-currency support and localised payment methods, empowering businesses to thrive in the international marketplace.​

●  Advanced security and compliance: As we navigate through stricter regulations like PSD2 and GDPR, the future of payment gateways is set to prioritise security more than ever. Anticipate remarkable advancements in encryption, tokenisation, and fraud detection technologies that will safeguard data privacy and secure transactions.​

●  Blockchain and cryptocurrencies: Although still in a relatively nascent stage, blockchain technology holds the potential to transform subscription payments by facilitating quicker, more transparent transactions with reduced fees. Crypto payments have the potential to gain broader acceptance for subscription services.​

●  Subscription flexibility: With the growing desire for adaptability among customers, payment gateways are set to provide advanced billing options. This includes pay-as-you-go models, seamless upgrades and downgrades, and dynamic subscription pricing that adjusts according to usage.

Conclusion

With the expansion of the subscription economy, businesses across different sectors—be it gyms and wellness, food and drink, and product delivery services—are reaping the benefits of recurring payment gateways. From robust platforms like Stripe and Chargebee to user-friendly solutions like Wonderful, subscription payment gateways are transforming with innovative features such as AI-driven personalisation, enhanced security, and multi-currency support. By harnessing these technologies, businesses can secure their payment processes for the future, evolving alongside emerging trends and customer needs.

FAQs

What is a recurring payment?

A recurring payment is a scheduled transaction in which a customer is charged for a good or service regularly, like once a month or once a year. This model is frequently used for subscriptions like gym memberships, streaming services, or SaaS products. It ensures that businesses get paid regularly without having to do manual billing every time.

How to collect recurring payments online?

To collect recurring payments online, you must partner with a payment subscription gateway that facilitates automated invoicing. Businesses can establish automated billing cycles, administer customer subscriptions, and handle retries for failed payments using platforms such as Wonderful, Stripe, PayPal, or WooCommerce subscriptions. Additionally, the process is simplified through the integration of eCommerce sites and customisable invoicing.

Photo by Tyler Franta on Unsplash