5 Ways to Avoid Failed Payments for B2B SaaS

Your SaaS subscribers rely on your services. The last thing they want is to get disconnected because of a failed payment. 

Yet, there’s been a rise in payment failures lately. In fact, 41% of B2B SaaS business owners report payment failure as their top most concern, outranking even customer acquisition. 

Fortunately, there are a few ways you can avoid B2B SaaS failed payments and ensure your business runs smoothly. 

But before we discuss these ways, let’s understand what causes these payment failures. 

What Causes B2B SaaS Failed Payments

A payment failure occurs when subscribers cannot process a financial transaction involving credit cards or any other payment method. 

While there are tons of reasons that could cause a payment failure, here are some of the most common ones:

• Incorrect payment information, e.g., wrong billing information, card number, or expiry date, 
• Lack of financial transparency and compliance with revenue recognition regulations as outlined in this Younim expert guide.
• System downtown occurs when your system is undergoing maintenance, needs an update, or is experiencing a processing outage. 
• Unsupported payment method. This could be unsupported currency or bank or using outdated payment gateways.

How to Avoid Failed Payments for B2B SaaS

Not all B2B SaaS failed payments are avoidable, but some indeed are. Let’s look at six ways to avoid failed payments for your B2B SaaS business beforehand. 

1. Provide Multiple Payment Methods

As a B2B SaaS business, it’s always a good idea to have a wide portfolio of payment methods for your customers to choose from. 

Credit and debit cards are customers’ preferred online payment method, but you can explore alternatives like bank transfers, Automated Clearing House (ACH) transactions, and digital wallets. 

There are many compelling reasons why you should consider diversifying your payment methods:

• Alternative payments give subscribers a secondary option if their primary payment method fails. 
• Providing different payment methods can help avoid involuntary churn. Simply put, if your subscribers don’t pay by card, their payments will not fail due to issues with card details or infrastructure.

2. Keep Your Customers’ Payment Details up to Date

Did you know that at any given time, one in three customers’ credit card is about to expire? Theoretically, that’s 30% of your SaaS business lost to involuntary charm. 

This explains why it is crucial for your customers to update their payment details beforehand. 

A great way to do this is through pre-dunning, which involves progressively sending out emails to your subscribers, alerting them that their payment is due. 

Pre-dunning emails remind your customers to update their payment details before their subscription is due. You can therefore send a pre-dunning email 10, 5, and 3 days before your customer’s card is due to expire. 

3. Notify Your Customers About Out-of-Range Payments

As a B2B SaaS company, anyone across the globe may want to use your services. Customers may try to process payments from countries out of range, leading to a failed payment. 

In such instances, you can inform your customers that their location is out of range, which may prompt them to use a different payment method. 

4. Reach out to Your Customers With Solutions

Referencing Attrock’s comprehensive guide on creating an effective SaaS startup sales strategy, exceptional customer support is what will ensure your subscribers remain loyal to your brand.

So, in case of a payment failure, promptly reach out to your customers with the steps they need to take to update their payment methods or card details.

If you know why their payments failed, you can guide them towards rectifying this issue. 

The more information your customers receive about correcting their payments, the more likely they are to try again the next time a payment fails. 

5. Identify Any Card or Financial Restrictions

Sometimes, a transaction is declined due to restrictions. Your customer’s card may have financial or structural restrictions, such as HSA/FSA cards that only cater to health payments or limits on international payments. 

If this is the case, prompt your customer to try a different payment method before making any payment to prevent payment failures. 

Wrapping Up

Despite the multiple causes of B2B SaaS failed payments, you can still maximize revenue by following the abovementioned strategies. 

Remember, losing your customers is just as big of a deal as gaining them. So battle your payment failures right before they occur. 

All the best! 

About the Author

Reena is the Director of Operations and Sales at Attrock, a result-driven digital marketing company. With 10+ years of sales and operations experience in the field of e-commerce and digital marketing, she is quite an industry expert. She is a people person and considers human resources as the most valuable asset of a company. In her free time, you would find her spending quality time with her brilliant, almost teenage daughter and watching her grow.

Social connects: LinkedIn, Twitter

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