As a subscription-based business, choosing the right payments processor and setting up a recurring payment system for your customers is critical to running a successful company.
In fact, here at Baremetrics, we know all about the importance of gaining insights while cutting costs, which is why we offer a 14-day trial.
In this guide, we’ll go over how to set up recurring payments and handle invoicing in a manner that’s streamlined, convenient, and low on fees.
Setting up recurring payments begins with defining the subscription options you hope to offer.
This is an important first step, as the number and complexity of the options you’d like to provide to your customers may influence your decision regarding which platforms will work for your business’ recurring invoices.
When defining your subscriptions, be sure to note the following:
SaaS businesses, in particular, tend to have a number of subscription complexities to deal with that, at first, might not seem like a big deal.
Legacy billing systems were not designed with subscription complexity in mind, and that gap creates real operational risk. Moss Adams outlines in their 2025 billing guide how the complexity of subscription billing and renewals in modern SaaS, including mid-cycle upgrades, usage overages, and multi-currency support, frequently exposes cracks in generic accounting or invoicing tools.
For instance, if you charge a user a flat monthly fee in addition to variable usage fees, this is something your recurring payment processor needs to be able to integrate, calculate, and handle properly.
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Once you have clarified exactly what your subscriptions entail, you’ll have a better idea of what features to look for in the payment processors on the market. However, before you start reviewing billing systems, you should first understand the different types of payment processors out there.
While you’re comparing options, also be sure to check out Baremetrics. With our 14-day free trial, we make it easy to gain insights that will drive your business’ growth without ever straining your budget.
Baremetrics Pricing Options: Pricing and Features
A third-party payments provider, like Stripe, will process payments on your behalf, putting all of the money into their own merchant account before passing it on to you.
Once a transaction is completed, the turnaround time is typically 2 business days. That means revenue will take 2 days to get from Stripe (or the payment providers of your choice) and into your business’ bank accounts.
A merchant account provider, on the other hand, provides your business with a dedicated merchant account. This means you have revenue in-hand instantly, but it also means a long underwriting and approval process. Whereas you can set up a payment provider like Stripe in under a day, getting a dedicated merchant account may take a few weeks.
Recommended reading: Tiered Pricing Model
Comparing the pros and cons of payment providers and merchant accounts providers will prove very helpful in narrowing down your options, as your selection will ultimately change your choices entirely.
If you want an independent benchmark for how today's billing platforms stack up, Forrester's Q1 2025 evaluation of recurring billing solutions is a useful reference. The report evaluates vendors across criteria like pricing flexibility, integration depth, and scalability, which maps directly to the checklist you should be running through before signing up with any processor.
Popular third-party payments service providers include:
Popular merchant account providers include:
Taking the time to compare the services that interest you is the essential next step. Each one will have its own documentation and customer service to help get you up-and-running.
The recurring billing software market has matured significantly, and not all platforms are built the same. The 2025 subscription billing software landscape report from Featured Customers highlights how businesses are evaluating tools on criteria like dunning automation, proration handling, and revenue recognition support — all things worth checking against your own requirements list.
Finding the right payment provider to handle your recurring billing and invoices is just the first half of the equation.
As you begin processing your automatic payments, whether, by credit card or any other payment options you choose to provide, it’s important that you know exactly when that money is coming in and how you can earn more of it.
When it comes to your business, automatic billings are anything but hands-off. While they provide “set and forget” convenience for your customers, you need to be paying close attention to your subscriptions to measure things like conversions, retention, and what you can do to recover lost customers.
That’s where the power of Baremetrics comes into play.
Having a customer’s credit card on file simply isn’t enough to keep you in business. If you want to keep subscribers happy and coming back month after month, you need metrics on your side powering your insights.
You can start today by signing up for a 14-day free trial from Baremetrics and see for yourself the difference the right data can make.
Setting up recurring payments is only half the job. The other half is building a system that handles failure gracefully because payments will fail, whether cards expire, banks flag transactions as suspicious, or customers hit their credit limits.
According to industry data, involuntary churn from failed payments accounts for a significant portion of total subscriber loss for most SaaS businesses. If you're not actively recovering those payments, you're leaving money on the table every single month.
This is where dunning automation earns its keep. Dunning is the process of automatically retrying failed payments and communicating with customers to update their billing information.
A basic dunning setup might retry a failed charge after 3, 5, and 7 days. A smarter one uses logic that factors in the failure reason: a card decline due to insufficient funds is different from one flagged for suspected fraud, and your retry timing should reflect that. Some processors and billing tools have this built in; others require a third-party integration.
Before you commit to a platform, ask specifically what their retry logic looks like and whether you can customize it.
Baremetrics' Recover tooling is built exactly for this scenario: it surfaces failed payments, automates outreach to customers with expired or declined cards, and helps you win back revenue that would otherwise churn silently.
If you're running a subscription business and you don't have a dunning workflow in place, that's the first thing to fix once your payments system is live. The best recurring billing setup in the world still loses money without it.