Categories: International

DocuSign And GoCardless Team To Reduce Global B2B Subscription Friction

The continuing rise of cross-border commerce, B2B digital transactions and international recurring payments are among the main trends that will carry into the 2020s. But there remains a significant amount of friction at the intersection of all those trends, and that provides an opportunity for payments services firms operating in this space.

At that intersection exist international B2B recurring payments and subscriptions — an area that can cover everything from the software used for daily operations to the loans needed for business growth. As those recurring payments take a more dominant role in the digital ecosystem, ways to reduce the costs of those transactions are emerging, including using direct debit instead of payment cards for such recurring payments.

In a PYMNTS interview with Karen Webster, GoCardless General Manager Pranav Sood talked about making things easier for B2B operations to digitally and seamlessly collect payments around the world, and how that space could evolve in the coming years. The interview came as GoCardless announced a new, recurring payments deal that involves U.S.-based DocuSign, a company that provides digital document signing services.

Fewer Failures

In general, the goals of recurring payments are pretty clear.

“They want to cater to customer preference, reduce payment failure rates and decrease transaction costs,” Sood told Webster.

Failures can happen, for instance, when credit cards on file expire, which introduces new friction into the relationship between buyers and sellers. To get around that, GoCardless has created a global bank debit network, which enables recurring payments without the friction associated with credit cards and other payment methods. The company processes some $10 billion worth of transactions per year.

“Users actually want to use direct debit,” Sood said. Not only does that reduces those transaction costs but it cuts down on subscriber churn. “You are significantly increasing your payment success rate.”

The new deal with DocuSign helps to illustrate those points.

The document-singing services provider is deploying the GoCardless SaaS-based payments platform to simplify the recurring payment process for DocuSign’s European customer base, the company said. Customers of DocuSign will access that payments platform via Zuora, and then be able to pay for DocuSign services via direct debit — another option alongside credit cards and PayPal. The GoCardless payment option will appear on DocuSign checkout pages, Sood told Webster.

The deal is based on the fact that about 25 percent of DocuSign’s new customers in the U.K. and Europe have paid via GoCardless-enabled direct debit, according to GoCardless. More broadly, the company said that in the U.S., direct debit stands as the second-most popular payment method for not only B2B-based online subscriptions, but for invoices and installment transactions as well. Such recurring payments, as Sood told it, can also include retainers to such professionals as accountants and attorneys, and loans.

“Invoicing is one of our core payment use cases,” he said. “We want to take the pain out of getting paid.”

Payment Opportunity

As recurring payments and digital B2B transactions continue to gain steam, there will be more openings for companies such as GoCardless.

“We see a huge amount of opportunity,” Sood said. “The way cross-border and recurring payments have worked in the past has not been a way that worked for merchants or customers that have to deal with them.”

Not only that, but specific marketing regulations and FX risks can also put more anxiety and friction into these types of recurring payments.

“We are making bank debit super easy for businesses to use around the world,” he said.

Earlier this year, GoCardless raised $75 million in venture funding. It has recently expanded into the U.S. and serves some 40,000 businesses around the world.

Subscription commerce and recurring payments are among the hottest areas of digital going into 2020, and that goes for both the B2C and B2B areas. For example, according to PYMNTS research, more than half of all Americans now subscribe to digital news or entertainment streaming services, and such offerings are already beginning to crop up in new industries, like cars and financial services.

Just offering subscriptions isn’t enough to gain customers these days — not with the subscription market set to reach more than $500 billion by 2023. Merchants must also deal with consumers who are rapidly changing their minds about what they want. Additionally, offering competitive features, pricing and services can be a significant challenge for small and medium-sized businesses (SMBs).

This new deal involving DocuSign could perhaps offer a glimpse of what’s next on the path to less friction for recurring payments and B2B subscriptions.

Get our hottest stories delivered to your inbox.

Sign up for the PYMNTS.com Newsletter to get updates on top stories and viral hits.

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Recent Posts

Agora Services Debuts New Tools For SMB Banking

Challenger bank Agora Services wants to address challenges with banking for small businesses with a new solution called Agora SMB,…

2 hours ago

Google Almost Done With Transition To SAP Ariba Network

Google's transition to SAP Ariba's cloud-based services has a completion date set for Aug. 24 after multiple waves that began…

2 hours ago

Fed Moves Ahead With FedNow Despite Objections

Not everyone favors the Federal Reserve Board’s launch of its settlement service designed to eliminate the three-day check clearing and…

3 hours ago

Pelosi, Mnuchin Call For Reopening Stimulus Talks

Weeks of failed negotiations on pandemic-related aid has led to House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin, representing…

3 hours ago

Bitcoin Daily: S. Korea To Use Blockchain To Collect Highway Tolls; Polish Financial Watchdog Warns Of Fake Crypto Scams

South Korean highways could see blockchain-based toll booths before the end of the year, according to a report from Crypto…

3 hours ago

CHAMPS Group Purchasing Works With Procurement Partners On Smoother P2P Services

CHAMPS Group Purchasing is partnering with Procurement Partners, which works in procure-to-pay (P2P) solutions, to provide a new service for…

4 hours ago