We live in the era of subscriptions. No need to own a bike, you can subscribe to a shared bicycle platform. Why own a dvd-collection when you can subscribe to a video streaming service? If you want you can sign up for anything, from new clothes to fresh flowers. All these subscriptions require seamless, safe and reliable recurring payments. With the launch of Stripe Billing this just got a lot better in Europe.
Stripe Billing now in Europe
The subscription e-commerce market has grown more than 100 percent a year over the past five years. Currently, 32 percent of people prefer to buy goods via subscriptions than one-off purchases. Europeans love subscription services. They are growing faster here than in the US.
Stripe is already at the forefront of the fintech business, setting the standard since their launch in 2011. The startup, based in San Francisco, creates the infrastructure to make online payments easier. Today they launched their Stripe Billing product in Europe. It is built on the core payment platform of Stripe, but completely designed with subscription services in mind. It simplifies the recurring billing process for SaaS and subscription-based companies and has some nifty tricks up its sleeve. Here’s three of them, which will make the life for a lot of European businesses a lot easier:
1: Smart retries lift revenue by 7 percent
The first one is machine learning that Stripe uses for its ‘smart retries’. When an automatic payment is declined, the system will figure out the best time to try again. No need to go through the process of manually retrying to bill a declined card. In the USA, where Stripe Billing was launched last year, these smart retries have already led to an average of 7 percent lift in recovered revenue for businesses using the service. This is money those businesses would simply not have earned without the service.
2: Automatic hosted invoices get paid 3 times faster
Second, Stripe Billing automatically generates invoices on the businesses’ behalf. These are not static bills. Instead, the hosted invoices of Stripe are interactive payment pages. These make it easier for customers to submit a payment instantly. They don’t even need to open a new browser tab, but can take care of it right away. According to Stripe, these hosted invoices get paid three times faster than the regular ones. Less waiting for money should appeal to every smart entrepreneur.
3: Built-in VAT tools for all EU-countries
One of the major challenges for European online services is VAT across the European Union. Having users in different countries makes sense from a business standpoint. But validating, collecting and reporting the various rates for different countries and industries can be tedious. Stripe Billing has tools that handle European VAT with ease. This makes doing business within the EU a lot easier.
SCA ready from the start
On top of that, Stripe Billing is already fully compliant with the new radical changes online payments will face. Along with Europe’s second Payment Services Directive (PSD2), the Strong Consumer Authentication (SCA) will also go into effect. This will require over 300 million European online consumers to confirm their identity using a second factor, besides their password or credit card number, to complete a purchase.
For business requiring recurring payments, this is especially challenging, since their customers are accustomed to begin charged automatically. Stripe Billing is able to identify exactly which charges require SCA and send customizable emails to subscribers when this affects them. SCA will go into effect later this year. By getting started now with Stripe Billing, your recurring payment process will be future proof.