To simplify the recurring billing process for Software as a Service (SaaS) and subscription-based companies, Stripe has rolled out Billing. The service combines advanced machine learning with automatic card updates to help businesses increase recurring revenue at a time of growth for subscription-based models, Stripe said in an announcement.
“SaaS, subscription and recurring revenue business models have become a major force for economic growth on the internet,” Jordan McKee, principal analyst at 451 Research, said in a statement. “However, for the vast majority of companies, running a billing and subscription system at any scale is both laborious and costly. Stripe’s new Billing product intends to mitigate this complexity and expense while democratizing access to enterprise-grade billing tools for companies of all sizes.”
With integrated invoicing and bank transfers, for example, Stripe automatically charges a customer on a set day after a business assigns the customer to a particular subscription plan. The service can also generate invoices and reminders and streamline accounts receivable functions by automatically matching incoming payments to outgoing invoices. In addition, Stripe Billing supports fully integrated Automated Clearing House payments and wires.
Through an automatic card-updater feature, Stripe can also auto-update tens of millions of cards every year. As a result, Stripe said that companies using Stripe reported a 4 to 8 percent revenue increase from cards that would’ve otherwise expired. And, with machine learning-powered smart payments, Stripe can automatically identify the best moment to retry a particular failed payment.
The launch comes as the subscription eCommerce market has grown more than 100 percent a year over the past five years, according to McKinsey. In addition, Nielsen said 32 percent of people would prefer to buy goods via subscriptions rather than one-off purchases.
“We’ve reached an inflection point in the long arc of online commerce,” Tara Seshan, product manager for Stripe Billing, said in a statement. “SaaS companies have been some of the internet’s greatest success stories up to now, but we’ve barely scratched the surface of what’s possible. With Stripe Billing, we’re democratizing access to enterprise-grade billing tools, allowing companies of all sizes to grow their recurring revenue more steeply.”