How to Set Up Recurring Billing Using the NMI Gateway

Successful businesses optimize billing to turn it into an anti-churn strategy. Due to its recurring nature, billing is an important part of the customer experience loop. That’s why businesses must focus on refining their payment processes for both local and international customers.

For this, their choice of payment gateway matters a lot. Because each gateway comes with its own set of supported payment options, security features and processing fees. Businesses should go with gateways that make their customers’ lives easier, and their payment collection smoother.

NMI is one renowned gateway that works in 100+ countries. Its impressive reach is the reason why businesses choose it for seamless international payments. What NMI lacks though is native recurring payment functionality. But there’s nothing that a good subscription management software can’t solve!

That said, let’s get into the specifics.

What NMI Does and Doesn’t Do

NMI (Network Merchants Inc.) is an internationally available payment gateway that makes online payments effortless. This gateway has flexible APIs that allow it to integrate with many ecommerce sites. It also provides businesses with its own hosted payment pages in case they lack a setup of their own.

NMI’s supported payment options include credit/debit cards, gift cards and ACH. It is trusted by customers due to its smart security measures as well. These are some of the security features it offers:

• PCI-Compliance

The gateway is PCI-compliant that shows that it is dedicated to make payments safe. It protects customers’ payment information so that it can’t be accessed and exploited by unauthorized parties.

• Tokenization

It uses the tokenization method to keep payment data secure. Meaning, it encrypts the payment data by converting it into tokens that cannot be read by the merchant’s payment system, or by any third-parties. So customers can pay through NMI with peace of mind.

• Fraud Detection

NMI takes fraud prevention seriously. It doesn’t only detect fraud, but also empowers businesses to deal with it before it actually happens. It offers its iSpyFraud function in which you can set up fraud prevention rules yourself. For instance, you can define the rules for suspicious transactions, so that when such a transaction takes place twice, NMI stops it cold.

However, despite its amazing payment processing features, NMI cannot automatically bill on a recurring basis. This is what it lacks:

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• Invoicing: Recurring invoice creation is at the heart of subscription businesses. But NMI can’t generate invoices like a subscription management software does. Nor does it support any billing cycle logic.

• Proration: Proration is needed for mid-cycle subscription plan changes. It entails adjusting customers’ charges, and then billing them the updated charge.

• Dunning: NMI also doesn’t initiate any payment retry attempts on its own. It also doesn’t notify customers when their payments fail.

Challenges of Setting Up Recurring Billing with NMI Alone

It’s good to have NMI as your default payment gateway, but NMI alone doesn’t help you with subscription payments. In fact, it makes recurring payment collection more challenging. These are some of those challenges:

• Manual charge configuration

NMI allows the setup of only fixed charges and fixed billing intervals. Businesses cannot do much beyond that. Complex charge setups, such as usage-based charging, tier-based charging, and multiple billing cadences are not available.

If businesses want to avail these charge types, they have to rely on manual means. They can’t benefit from automated billing that caters to dynamic charging scenarios.

• Limited subscription management

NMI lacks all the most desirable management features for subscription businesses. These features include invoicing, subscription bundles, multiple billing models, dunning, proration, and self-service portals. Without these features, it’s not possible to unlock the full potential of the subscription business model.

This means that it’s better to let NMI take care of payment processing only. If you have advanced needs, and an audience that demands subscription flexibility, then NMI is not your subscription management solution. You definitely need a dedicated platform for that.

• Higher payment failure chances

Since NMI doesn’t support dunning, it can’t do anything to prevent payment failures. A business relying on NMI solely would have to wait on its customers to respond to its messages and retry payments. Passive waiting, such as this one, can delay payments even more, especially when the customers are also unresponsive.

And this can eventually lead to revenue loss too. That’s why it’s important to have dunning measures in place, that escalate depending on the gravity of the situation.

How SubscriptionFlow Powers Recurring Billing with NMI

SubscriptionFlow lets businesses leverage NMI’s payment processing capabilities to the fullest. The NMI payment gateway can be connected with SubscriptionFlow’s recurring billing solution in just a few steps. After connection is established, businesses can set it as their default gateway, and start accepting all customer payments through it.

Like this, you get to have the best of both worlds: elite payment processing, and elegant subscription management. Here’s what this duo provides your business with:

• Automatic and dynamic recurring billing

SubscriptionFlow takes recurring billing to new heights. It allows full customization of billing amounts, and intervals. This means that businesses can easily implement billing models of different types, such as tiered billing.

The best part is that the billing is automated, and it doesn’t demand any manual grind. Customers are billed right on schedule, minimizing payment delay as much as possible. The software also ensures that customers’ bills match their plans, and that there is no billing confusion and unfair charges.

• Invoice creation

Invoices are billing proofs. They list products or services for which the payment is due, and also the payment date, method and amount. SubscriptionFlow handles invoice generation like no other. No matter how much customer volume you have, all the invoices are created instantly and delivered automatically as well.

What’s more, invoices are adjusted in real-time too. When bills are prorated due to plan changes initiated by the customers, new invoices are made for them. So the software registers plan changes, and executes billing adjustment all on its own.

• Payment retries

It’s common for customers’ cards to get declined if they are low on funds or expired. In that case, businesses can automate payment reminders and payment method update messages to customers. This urges customers to pay faster.

Moreover, businesses can actively retry payments themselves too. SubscriptionFlow enables that, and makes retry attempts through NMI. So that when the customers’ payment issues are resolved, their payment is fetched automatically too. This reduces dependency on customer action.

• Multiple plans

With SubscriptionFlow, businesses can set up plans flexibly. They can not only change the plan duration (such as monthly or quarterly), but can also tie plans to different billing models. So they can have usage-based plans, fixed plans, or hybrid plans, activated all at once.

• Customer portal

Customers are given self-service portal access. With this access, their reliance on the business’s support team is reduced. Customers are empowered to take their subscription management in their own hands. They can cancel or pause whenever they want to, and can also switch to any other plan any time.

This freedom of choice is actually a great retention driver too. It makes the customers feel in control, and their experience more transparent. Of course, SubscriptionFlow sees to all the changes that customers make and updates their accounts automatically.

NMI + SubscriptionFlow: Best Practices

Fully harness the capabilities of this integration with the following best practices:

• Invoice in different currencies

NMI is a global gateway. SubscriptionFlow also supports a range of currencies. Combined, they make a great fit for international payment acceptance. You can enable multi-currency invoicing in SubscriptionFlow so that each of your customers gets a localized and friendly payment experience.

• View analytics

You can capture payments with NMI, and monitor revenue in SubscriptionFlow. The subscription billing software offers insightful analytics regarding recurring revenue, customer lifetime value, failed payment and successful retry rates, and more.

• Set up backup gateways

No payment gateway is fail-proof. This means that NMI too can have its downtimes, whether due to processor issues, or other reasons. In that case, it’s great to have some backup gateways to re-route payments and make them successful.

SubscriptionFlow allows integration with a number of gateways, like Stripe, Braintree, and Adyen, so that even if NMI fails momentarily, the customer payment is still successful.

The takeaway is that NMI works great as a payment gateway, but lacks a lot when it comes to subscription management capabilities. If you want to use NMI to set up recurring billing, sign up for SubscriptionFlow, and learn how it helps businesses like yours to succeed.