How ISOs Can Increase Revenue by Offering Subscription Management

To stay dominant in the payment industry is harder than it seems. For years, independent sales organisations (ISOs) have been focusing on only one aim: helping merchants swipe a card. Operating as intermediaries between merchants and banks or large payment processors, they aid merchants in accepting electronic payments, credit/debit cards etc. But now, merchants are exploring ways to grow their business with an existing customer base instead of one-time payments. 

The e-commerce market is also evolving. From daily deliveries and gym memberships to streaming platforms and acquiring software access, the subscription economy is everywhere. As an ISO, this shift is your biggest opportunity. By switching to subscription management service providers, ISOs can lock in merchant loyalty, reduce churn, and open entirely new streams of predictable revenue. 

Managing subscriptions is easier than ever with SubscriptionFlow. It provides the subscription billing infrastructure as the technology partner, while ISOs do what they are best at: acquiring merchants, managing relationships, and helping them adopt and scale payment solutions. Together, SubscriptionFlow and ISOs can deliver more value to their merchants and unlock new revenue opportunities. 

Learn more about how this partnership works. 

What does Subscription Management Involve?

Subscription management refers to charging customers at set intervals in exchange for products or access to services. Beyond mere charging, it involves handling a complete subscription lifecycle. From onboarding a client to the renewal process, it involves managing upgrades, downgrades, changes in subscription plan, payment failure, and setting terms and conditions for renewals. 

Subscription management services for ISOs mean processing recurring payments for subscription-based merchants. Just like one-time payments, ISOs integrate with payment processors to route recurring transactions securely. This helps merchants to manage subscription logic without actually building an in-house subscription management setup. Acting as a value-added layer on top of existing payment processing, it offers merchants to process subscriptions without relying on any third-party tool. 

Core Features of Subscription Management

Key features of subscription management are:

• Recurring Billing: Charging customers automatically on pre-decided intervals is referred to as recurring billing. It can be weekly, monthly, or annually, etc. 
• Automated Invoicing: In simple words, it is like a digital receipt that payment is done. After payment confirmation, a copy is shared to customers automatically. In subscription management, automated invoicing is crucial to maintain records. 
• Dunning Management: Ability to retry failed payments automatically is dunning. An efficient subscription management system requires smart dunning systems that can notify customers and recover lost revenue. 
• Customer Self-Service Portals: With self-service portals, customers have the freedom to change or cancel their selected subscription plan. Customers can also check history, review invoice records, and change payment methods without waiting for customer support teams to respond. 
• Subscription Lifecycle Management: Subscription management platforms handle every stage of the customer journey, including trial management, changes in plan, renewals, cancellations, and reactivations etc. 

One-Time Payment Processing vs Subscription Billing

Traditional payment processing is geared towards an individual transaction. A customer buys something, payment is taken, and the transaction is complete.

Subscription billing is much more complex. With billing schedules, payment failures, customer interactions, and account changes, businesses need to manage recurring transactions continuously. 

ISOs that are simply providers of one-time payment processing services might find it difficult to satisfy the demands of contemporary recurring income companies.

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Why Merchants Need Subscription Billing Solutions

Subscription models are increasingly gaining momentum in every industry. The reason for their increasing popularity is financial predictability and the long-term relationship it offers to the customers.

Subscriptions are being used by the following industries:

• SaaS platforms
• Streaming services
• Online education
• Membership organizations
• Subscription ecommerce
• Fitness and wellness brands.
• Healthcare memberships
• Digital content providers

But as businesses grow, it becomes cumbersome to maintain recurring billing manually. The following are some of the frequent challenges that merchants encounter.

Failed Recurring Payments

A failed transaction occurs if the card has expired, funds are low, or there is an error with the payment gateway. In the absence of automated retry systems, businesses lose revenue in no small measure.

Manual Invoicing

Making invoices by hand is time-consuming and error-prone. Without an automated system, it is nearly impossible to generate invoices at the exact time when payment is processed. Moreover, manual invoicing also creates the possibility of charging customers incorrectly, eroding trust in the business. 

Churn Management

Subscription companies are always confronted with customer attrition. Merchants should have tools available to help improve their customer retention rate and automate renewals. Automation helps to provide error-free subscription management that streamlines customer experience and reduces churn. 

Revenue Tracking Difficulties

Manually monitoring monthly recurring revenue (MRR), churn, and customer lifetime value (CLV) can be very difficult. Without tracking these metrics, merchants are unable to make informed decisions that can help them to grow strategically in the future.

To overcome the challenges faced during manual subscription management, merchants are inclined towards choosing one cohesive platform that integrates complete subscription logic. In this way, they do not have to rely on disjointed systems to process payments and manage subscriptions. 

How Subscription Management Creates New Revenue Streams for ISOs 

With the addition of subscription management layers, ISOs move from a commodity provider to an essential business partner. Therefore, subscription management isn’t a simple add-on service; it is a key business growth tactic for ISOs. 

Increase Merchant Retention

Merchant retention is one of the biggest issues for ISOs. Payment processing services are often thought of as interchangeable, and many merchants keep on switching to new providers. Providing subscription management enables ISOs to be a part of a merchant’s business. In addition to processing payments, ISOs bring operational value by managing the entire subscription lifecycle. This makes it less likely for companies to change their processors as migration entails shifting their entire subscription database and billing logic. This leads to better long-lasting customer relationships, which lower churn rates. 

Earn Additional Revenue

From a mere one-time transaction, ISOs can move towards predictable, ongoing revenue streams via subscription billing. Subscriptions mean more transaction volume. When merchants process subscription fees through ISOs, it leads to higher processing fees over time. Moreover, ISOs can also introduce additional value-added fees or revenue-sharing arrangements in exchange for additional subscription management features such as automated billing, reporting metrics, dunning, and lifecycle tools. 

Attract High-Value Customers 

It is difficult for ISOs to secure sophisticated clients. By offering a subscription stack, ISOs can diversify their customer base by targeting SaaS companies, e-learning platforms, subscription boxes, and wellness brands. By serving various industries, businesses are less vulnerable to economic downturns in a single market. Moreover, offering tailored subscription solutions to different businesses helps to increase customer loyalty and aids ISOs to stand out from competitors. 

Expand Into High-Risk Subscription Markets

Recurring billing models are the foundation of many high-risk industries. Due to payment complexity and chargeback risks, these businesses typically demand advanced billing support. Primary examples of high-risk businesses are nutraceuticals, digital services, continuity programs, and telehealth services etc. ISOs with the capability to provide advanced recurring billing features can indeed work for these merchants and generate extra revenue opportunities.

How ISOs Can Start Offering Subscription Billing

To offer subscription billing, there’s no need to rebuild your entire infrastructure. Instead, ISOs can upgrade their existing systems via:

Partner With a Subscription Management Platform

The most important step is to partner with dedicated subscription management platforms like SubscriptionFlow. It helps to process recurring payments without having an in-house tech stack. Additionally, it cuts down development time and accelerates go-to-market plans.

Educate Merchants About Recurring Revenue

Audit existing customers that may be interested in subscriptions but are unsure how they can do so. ISOs can become advisors who can lead merchants towards a subscription model. 

Bundle Payment Processing With Subscription Billing 

Providing bundled services provides greater value for any merchant and enhances ISO value in the marketplace. It also boosts revenue per merchant. 

Offer Subscription Migration Support

Merchants face unforeseen challenges while migrating from manual systems to automated subscriptions. Migration support is one of the additional service offerings that ISOs can offer. 

Why SubscriptionFlow Is a Strong Fit for ISO Partnership 

Not every subscription platform is built with an ISO partnership in mind. However, SubscriptionFlow is specifically designed to help ISOs get a full subscription management solution that integrates with various payment systems. It enables ISOs to go beyond payment processing to provide comprehensive recurring revenue management services for their merchants. 

Flexible Gateway Integrations

SubscriptionFlow works with several payment processors, allowing merchants to remain with their preferred payment processors. This flexibility makes it easier and quicker for ISOs to grow their service as merchants don’t need to modify their payment configuration.

Automated Recurring Billing

The platform can automate the entire billing process, from creating the invoice to collecting the payment. This saves merchants the hassle of making manual payments and guarantees a regular income flow. ISOs benefit from this feature as it helps them avoid billing problems and boost customer satisfaction. 

High-Risk Business Support

Subscription businesses are often adapted by businesses that operate in high-risk industries where payment failures and chargebacks are inevitable. SubscriptionFlow is designed to manage these complicated environments and helps ISOs to serve merchants in different industries that are usually avoided by traditional billing systems. 

White-Label and Partner Opportunities

ISOs may consider partnership and white-label agreements for the delivery of subscription billing under their own brand. It enables ISOs to establish themselves in the market and to offer merchants extra value-added services.

Scalable Infrastructure

The growth of businesses leads to the complexity of billing needs. SubscriptionFlow is designed to scale from small startups to large enterprises. This scalability gives ISOs the option to work with merchants at every stage of growth without having to change platforms. 

Expand Your Revenue Streams with Subscription Billing 

Subscription billing is no longer optional for ISOs; it’s a powerful growth tool. With an increasing number of businesses implementing recurring revenue systems, the need for automated billing, smooth payment processing, and subscription lifecycle management is growing. 

ISOs supporting these features can be a differentiator in the payment market. Not only does it boost merchant retention and discover new revenue streams, but it also appeals to high-growth businesses by combining payment processing with subscription services. 

By collaborating with SubscriptionFlow, ISOs can offer seamless subscription billing solutions without extensive technical investments. 

Book a demo today and ensure long-term success and scalability.