Dealing, as we are, with recurring, online payments, means understanding that every payment goes through a standard set of chapters in its journey from issuing to receiving bank. The goal is to simulate, as closely as possible, a good old fashioned, face to face exchange of service for money. The challenge is to do with payments gateways, payment processors, card networks or direct debit networks or virtual wallets in between.
Concerned with failed payments, this post will be structured around the stages that a recurring, online payment goes through when it is not successful - what I’m calling the ‘failed payments life cycle’. Like a butterfly life cycle except it’s causing your customers to churn out.
Depending on whether you’re using invoices or not, the payment failure looks a little different:
|Invoice based payments||Non-invoice based payments|
|Sending out an Invoice||Payment is due|
|Payment is due||First try failed|
|First try failed||Retrying a payment method|
|Retrying a payment method||Dunning emails|
|Dunning emails||Post dunning action|
|Post dunning action|
In both cases, the charge can be immediate or delayed, it can be automated (using a card or a direct debit order with the bank) or manual (using cash or a cheque), and it can be recorded and filed automatically (by a billing system) or manually.