Recurring revenue is the foundation of most successful subscription-based SaaS businesses. You can track monthly recurring revenue (MRR), annual recurring revenue (ARR), or both, but it doesn’t matter if the payment infrastructure fails you.
There are a lot, and we mean a lot, of reasons why customers churn, or subscription revenue is lost. Expired cards, payment declines, insufficient funds, fraud, chargebacks, cross-border issues, not to mention issuer and authentication failures.
That’s why, in this article, our team wants to explain why global SaaS platforms lose customers. In many cases, it is not because the product fails, but because the payment does.
Learn why you may need dedicated merchant accounts for SaaS businesses, and how they can improve your business operations.
The recurring billing struggle: involuntary churn and payment friction
Not all churn looks the same, and treating it as one problem leads to the wrong fixes. Voluntary churn is a customer actively deciding to leave – they cancel, they downgrade, they stop using the product. At the end of the day, they simply choose the wrong product, or they didn’t like it and changed their mind.
Involuntary churn is different, and arguably worse: the customer wants to stay, but the payment fails, and unless the customer is an active user, they won’t notice it early unless your billing system catches it. That’s how you lose real customers involuntarily and why you need to reduce involuntary churn.
The hidden toll of involuntary churn on SaaS MRR
Industry estimates put involuntary churn at 20–40% of total subscription churn. It is not that surprising when you think about it – a subscription is built on convenience. A customer just buys a subscription and forgets about payments. Expired cards, outdated billing details, insufficient funds, temporary processing issues, and issuer fraud controls are common causes. A customer whose card expired mid-cycle may forget to update their card details.
And if you are not a company that provides an everyday-use type of subscription, it can take some time before the customers notice the card issue.
Multiply that across thousands of subscribers, and it becomes a major revenue drain, making it critical for subscription platforms to find proactive ways to reduce involuntary churn.
Cross-border declines and currency conversion barriers
When a subscriber is billed in a currency that isn’t their own, this can happen: the transaction may cost more due to conversion markups, and the subscriber’s local bank may be more likely to decline the cross-border transaction. As a result, the customer may become frustrated or lose trust in the business.
Cross-border card declines are a common – and potentially fixable – source of failed renewals for SaaS companies.
If your subscription costs $60 but the client pays with a card denominated in euros, currency conversion and cross-border fees may increase the final amount they pay. The payment will not normally go through SWIFT – card subscription payments are processed through the merchant’s acquirer, the card network, and the customer’s issuing bank. SaaS payment processing is brutal if you do not optimize your payment infrastructure.
Technically, this looks like this: if your checkout can’t localize pricing and payment routing, you’re relying on a foreign issuing bank to approve an unfamiliar cross-border card transaction. This can also increase transaction fees.
Credit card processing fees and chargeback risks
Even successful transactions carry cost. Interchange fees, cross-border card markups, and chargeback fees resulting from friendly fraud disputes – these are nothing new for a SaaS business that accepts recurring card payments.
A single disputed transaction can cost more than its own value once the refunded payment, the chargeback fee, and the operational time spent contesting it are added together.
Without deliberate SaaS chargeback prevention, you are risking too much.
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Strategies to optimize global subscription billing
Improving payment performance rarely requires dramatic operational changes. Finding a good payment provider can really help you out when you optimize global subscription billing.
Localized payment acceptance and multi-currency pricing
Presenting prices in a customer’s home currency and routing the transaction through local acquiring networks improves approval rates.
It is just convenient and customer-friendly. Also, local processing is cheaper and way faster.
Plus, you will not face a currency conversion problem. It is why a multi-currency merchant account is important to have if you don’t want to face issues associated with currency management.
Diversifying payment rails with direct account transfers
Relying exclusively on card networks as a payment method can cause issues. Cards expire, get reissued, get flagged, get lost. Adding a direct account-to-account (A2A) payment method for customers removes many card-specific risks, and in Europe it is gaining adoption.
This is precisely the gap Genome is built to close and we offer merchant accounts for SaaS businesses. As an electronic money institution licensed and supervised by the Bank of Lithuania, we help streamline SaaS payment processing for companies operating across borders.
Genome’s instant bank payments are built on Open Banking technology, allowing customers to use the Pay by Bank payment method. They can use account-to-account payments to pay merchants instantly with SEPA Instant Transfers. SEPA Credit Transfers are available for merchant operations as well!
Open Banking became a trend in Europe, and we integrated tools to let SaaS companies accept direct account-to-account payments across Europe, bypassing card rails entirely.
Because there’s no card to expire, no card to be declined by a card issuer for “suspicious activity,” and no cross-border card markup, instant bank payments can directly reduce involuntary churn while offering near-instant settlement when SEPA Instant is available and potentially lower fees than traditional card processing. For a subscription business, that combination – fewer failed renewals, faster access to cash, lower cost per transaction – is the entire business case for diversifying beyond cards.
And soon, our dedicated merchant account will allow SaaS businesses to accept online card payments from Visa and Mastercard globally while running a true multi-currency merchant account with settlements in EUR, USD, and GBP.
Our fraud protection tools and alignment with 3D Secure 2.0 give SaaS operators a real answer to security concerns related to online card payments.
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Best practices for lowering churn and scaling SaaS payments
Infrastructure alone isn’t enough when managing merchant accounts for SaaS businesses – ideally you want to pair it with billing operations that catch failures before they become cancellations.
Implementing dunning workflows alongside alternative payment rails
Automated dunning – the sequence of payment reminders, automated retries, and other recovery actions used after a failed payment – is a typical story you surely encounter many times.
What is not typical and can be really valuable to you and your clients – pairing an email with a direct bank payment link gives a lapsed subscriber an immediate path to return and settle the outstanding payment. However, restoring future automatic payments may require a recurring bank payment mandate.
This is a convenient workflow you can come up with for emails for failed payments.
Auditing decline codes and transaction fees regularly
Decline codes are response codes that explain why a payment was rejected, and you should treat them seriously.
Billing teams should review payment logs to identify which regions, banks, or card types are generating disproportionate declines, then adjust routing accordingly if their payment setup supports routing controls.
You should distinguish soft declines like insufficient funds from hard declines like expired cards and certain fraud-related responses. If you don’t do this, a smart billing retry system will not help you.
Depending on your payment provider and contract, retry attempts may result in gateway, authorization, or excessive-retry fees.
The same discipline applies to chargeback data. Tracking dispute reasons alongside decline codes turns SaaS chargeback prevention into a real thing, and it’s far easier to do if your multi-currency merchant account gives you consolidated reporting across regions instead of a separate feed for every local processor.
Scale your SaaS subscription model with Genome
SaaS businesses are built on regular payments, and obviously any payment friction is not welcome here.
Someone cancels their subscription because they didn’t like it, or someone’s payment method expired or was replaced, and they forgot to update it.
You need a solid payment infrastructure and merchant accounts for SaaS businesses. Purpose-built merchant accounts for SaaS businesses, paired with localized card acceptance, direct account-to-account rails, and effective billing recovery tools, can help you optimize global subscription billing and keep recurring revenue more predictable.
If you’re ready to stop losing customers to expired cards and cross-border declines, open a Genome business wallet, apply for a merchant account, and activate instant bank payments – a practical way to reduce involuntary churn and scale your SaaS payment processing across borders.
