How does the №1 Ecommerce Platform in the world Shopify is trying failed payments?

I’m glad you asked.

First a bit of background.

Failed payments that leads to ‘Passive’ #churn is a hidden Revenue Killer 💳 for #SaaS Businesses

- It’s a bad customer experience
- Risk to lose the payment
- and a bigger risk to your net revenue LTV

… Shopify is no different

According to Andreessen Horowitz by adding fintech offering, SaaS businesses can increase revenue per customer by 2–5x and open up new SaaS markets.

Vertical SaaS companies — like Mindbody, Toast and Shopify — typically started by reselling financial services (primarily payments), they are now embedding financial products directly into their vertical software.

Shopify Monthly recurring revenues is at $149 million (up 35%) while payments and merchant solutions increased 21% to $1.6 billion “management said was driven in part by the increased penetration of Shopify Payments” (see source )

→ 🚨Shopify is making more money on payments then their “core” Monthly recurring revenue

Back to failed payment as a huge source of revenue lost/ growth

Involuntary churn refers to the loss of subscribers due to payment failures, not due to them actively canceling. While it is both possible and a worthwhile strategy to attempt to win back a customer during the cancellation process — involuntary churn is not intentional and in most cases, your customers aren’t even aware that their payment failed……

Shopify is trying failed payments 11 times, every 2 days (see the image) in what we (FlyCode) call a fixed-interval retry strategy.

We love Shopify, but it’s a bit of a legacy approach that ultimately reduces retry success rates vs. using a ML & AI based payment optimization

FlyCode Maximize Subscription Revenue with Dunning & Payment optimization AI

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