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Education

How to handle a customer's 1. The customer has insufficient funds: Unfortunately,
some payments simply fail because the account being
failed recurring payment charged has insufficient funds or the customer has
exceeded their credit limit. The customer can usually
rectify this by transferring funds into their account or
by providing new card information.
2. The customer's credit card information has
changed: If a customer's credit card expires or is lost,
stolen, replaced or otherwise compromised, their
account information will need to be updated. A failure
will also occur if a customer's billing address changes
and their account information is not updated to reflect
the new address. An automatic account updater
service (see the “Preventing recurring payment
failure” section of this article) can help prevent failed
payments.

3. The customer's bank suspects fraud: In some cases,
a customer's bank may flag a payment as fraud and
decline the transaction. This is usually done for the
customer's protection but can occasionally result in a
By Nick Cucci declined payment for a legitimate transaction. If this
is the case, notify your customer so they can contact
Fluid Pay their bank to resolve the issue.

n today's economy, the subscription-based business Resolving failed recurring payments
model is a popular way to ensure steady cash flow
for your business. According to Bianca Faidutti's Failed payments are frustrating but can be easily resolved
I report for Fusebill, https://bit.ly/2N0IASl, 70 percent if you have the proper systems in place. The first step is
of business leaders believe subscriptions are the key to understanding why the payment failed. If you're unable to
their future success. determine the reason for the failed payment, reach out to
your customer through your dunning email sequence to
The recurring revenue model creates a predictable and make them aware of their situation.
consistent stream of income while providing your and your
merchants' customers with the convenience of a hands-off In many instances, your customer may not be aware that
approach to paying for recurring goods or services. their payment has failed and will still expect to receive
the goods or services they believe they've paid for. Ensure
However, this model is not without its challenges. that your payment failed message is friendly, clear and
Businesses that rely on recurring payments can find concise so that your customer understands the situation
themselves in hot water when a customer's payment fails. and knows how to rectify it.
It's a nightmare scenario for business owners, as it can
quickly lead to lost revenue and frustrated customers. In most cases, they will likely be able to update their
account with the correct information or provide you with
Fortunately, there are ways to recover a failed payment and an alternate payment method. To retain your customers,
prevent payment failures from occurring in the first place. give them a few days to update their information before
If you or your merchants are struggling to manage failed taking further action regarding their account.
recurring payments, this guide is for you. I'll discuss how Automating payment retry cycles
to handle a customer's failed payment and explore some of
the best methods to prevent future payment failures. If you're using a recurring billing system, you likely have
Why do recurring payment failures occur? the option to schedule automatic payment retries. This
beneficial feature allows you to automatically retry failed
Understanding why a customer's payment failed is the first payments at regular intervals without having to manually
step to recovering the lost revenue and preventing future intervene.
failures. A recurring payment may fail for a number of
reasons. It's important to be aware of them so you can take Set up a payment retry cycle of at least three attempts over
appropriate steps to prevent or resolve the issue. Three of the course of one to two weeks if possible. This gives your
the most common reasons for recurring payment failures customer enough time to update their account information
are: or for any deposited funds to become available in their
account.

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