Subscriptions power many services, from music streaming to meal kits. These use recurring payments rather than one-off purchases. Businesses of all sizes are embracing subscription models for predictable revenue streams, with the revenue from the global subscription economy projected to reach $996 billion by 2028. But handling these ongoing interactions can be complicated without the right tools. Subscription platforms can help manage recurring payments and customer relationships.

In this guide, we’ll examine what features are important for subscription platforms, how they handle payments, and how Stripe can help businesses manage subscriptions.

What’s in this article?

• What is a subscription platform and how is it different from an app?
  
• How do subscription platforms handle payments?
  
• What kinds of businesses can benefit most from subscription platforms?
  
• What features should you look for in a subscription platform?
  
• How does Stripe help businesses manage subscriptions?
  
• How much do subscription platforms cost?
  
• How can a subscription platform help reduce churn?
  

What is a subscription platform and how is it different from an app?

A subscription platform is designed to manage recurring billing and customer relationships across various channels. It brings different parts of your business – payment processing, user authentication, customer support, and data analytics – together in one place so you can run a subscription-based service without switching between different platforms. You can typically use a subscription platform to manage payment cycles, set user permissions, or create specialised pricing rules.

Subscription platforms can usually integrate with multiple external services, such as email marketing tools, analytics dashboards, and tax software. They tend to be highly flexible, with customisation options for different subscription tiers or user experiences.

An app typically does specific tasks and lives on a phone or device, although there are also web-based apps. It often carries out a defined set of functions (e.g., streaming music) and is not usually able to integrate with other services or provide extensive customisation options.

How do subscription platforms handle payments?

Collecting payments is one of the most important tasks for any subscription platform. Missed or failed payments lead to churn and lost revenue. Here’s how a subscription platform handles payments:

• Initial sign-up: The subscriber enters their payment details (e.g., credit card number). The platform authorises the payment method to confirm they’re valid.

• Tokenisation and storage: The platform stores payment information in a secure format. Instead of saving raw card data, it creates a token as a stand-in for the customer’s payment details. This token can be reused for future charges and protects sensitive details.

• Billing cycles: Each subscription has a billing cycle – often monthly, but it could be weekly, annual, or another chosen interval. When the next billing date arrives, the platform initiates the charge using the stored payment details.

• Notifications: If a payment fails, the platform notifies the subscriber. Some platforms can detect a likely cause, such as an expired card, and prompt the user to update their payment information.

• Receipts: When the charge is successful, the platform sends a receipt to the customer.

• Automatic retries: A good platform will also have built-in dunning management for automatic retries when payments fail.

What kinds of businesses can benefit most from subscription platforms?

Beyond software and streaming entertainment, software models suit nearly every industry and any business that regularly delivers value. These are the business types that can benefit the most:

• Software-as-a-service (SaaS): Software companies often use subscription models to generate stable revenue and build closer relationships with customers. Instead of offering a one-time licence, they charge monthly or annual fees that bundle ongoing updates with security patches and new features.

• Consumer goods: Physical subscription boxes – such as coffee clubs, cosmetics samplers, and meal kits – empower businesses to predict demand and encourage repeat sales. Customers enjoy the convenience of automatic restocks, while businesses can manage logistics with a consistent order volume.

• Digital content and media: Podcasters, online educators, and content creators use subscriptions to monetise their work. Offering exclusive content or early access behind a paywall can turn casual listeners or viewers into dedicated fans who regularly contribute.

• Professional services: Consultants, design agencies, and coaching organisations often use retainer-style subscriptions. Instead of billing per project, they collect a recurring fee for ongoing support.

• Healthcare and wellness: Medical providers, telehealth platforms, and fitness apps bundle services into monthly programmes. A therapist might offer a set number of sessions per month, or a yoga instructor might charge a recurring membership fee to attend unlimited classes.

What features should you look for in a subscription platform?

Subscription platforms’ capabilities vary widely. Some focus purely on collecting payments, while others cover the entire subscription journey, including onboarding, analytics, and beyond. Below are some features to consider when you decide which platform suits your needs.

Automated recurring billing

A subscription platform should automate monthly, quarterly, or annual charges for your customers. Manual invoicing cannot scale when you have hundreds or thousands of subscribers. An automated system triggers on-time payments so your revenue flows consistently without manual intervention.

Customisable plans and pricing

Charging a flat monthly rate won’t fit every product or service. Some businesses need tiered plans for different levels of access, while others might charge based on usage or bundle one-off purchases with recurring invoices. The best subscription platforms can support all these pricing models.

Customer lifecycle management

Subscriptions help businesses strengthen their relationships with customers. Look for platforms that track where users are in the subscription lifecycle. Are they new sign-ups, in the middle of the cycle, approaching a renewal, or at risk of cancelling? Data on subscriber behaviour can inform how you engage with them. For example, you might offer an upgrade at the right moment or send a reminder when credit cards expire.

Ability to integrate with your existing tech

It’s common for your marketing software, support desk, analytics dashboards, and accounting tools to work in tandem. The subscription platform you choose should also be able to work with these systems to share data and update information across them when changes are made.

Payment security

Storing and handling customers’ payment details requires responsible management. The platform you choose should maintain rigorous security standards and comply with industry regulations.

Analytics and reporting

Metrics such as churn rate, lifetime value, and monthly recurring revenue (MRR) best contextualise recurring revenue. They reveal the business’s current state and areas for improvement. Using a platform that automatically tracks important numbers can save you time.

Dunning management

Credit card payments can fail for many different reasons, such as expired cards and exceeded credit limits. A dunning process alerts users when a payment fails and automatically retries the transaction. This can salvage what might otherwise become lost revenue without creating more manual work for your team.

How does Stripe help businesses manage subscriptions?

Stripe has a suite of software options and features that can help companies centralise their billing and payments. Here’s how Stripe can simplify recurring billing.

Stripe Billing

Stripe Billing handles the core functions of subscription-based businesses by creating subscription plans, implementing trial periods, and applying coupons or one-time charges. Stripe can support even the most complex pricing tiers, such as a basic plan for a fixed monthly rate and a premium plan that starts with a monthly fee and transitions to a usage-based model. You can set a schedule to automatically charge on a recurring basis so you’re not chasing payments every month.

Flexible integrations

Stripe is designed to integrate with customer relationship management (CRM) systems, accounting platforms, analytics dashboards, and more. For example, you can sync subscription data with your email marketing tool to automatically enrol new subscribers in a welcome series or connect with your customer support system so service reps can see a user’s billing status as they help resolve an issue. These integrations enable you to share consistent, up-to-date data across the organisation.

Global acceptance

Stripe supports multiple currencies, local payment methods, and localised payment pages. Allowing your customers to sign up with their preferred payment methods can improve conversion rates.

Security and compliance

Stripe adheres to the highest security standards. It tokenises payment details, handles compliance with the Payment Card Industry Data Security Standard (PCI DSS) for you, and helps shield you from fraudulent transactions with its built-in detection tools.

Dunning management and alerts

When a payment fails, Stripe automatically retries the customer’s card at optimal intervals. If the card is invalid, Stripe can alert the user to update their details. This hands-off but highly effective method can salvage payments that might otherwise be lost.

Flexible application programming interface (API)

For businesses that want to customise every detail of their subscription flows, Stripe’s API provides extensive flexibility for developers. You can build personalised checkout pages, link usage metrics to pricing, or create custom billing logic that branches by region. If you prefer not to write code, you can create your flow quickly with Stripe’s hosted solutions.

How much do subscription platforms cost?

The overall costs of subscription platforms can include transaction-based fees, monthly platform fees, or fees to add premium features. Understanding the pricing structure of a subscription platform is necessary to avoid budget shocks.

Flat monthly fees

Some platforms charge a flat monthly rate for their services. This can be appealing if you want a budget-friendly option that won’t fluctuate with transaction volume.

Transaction-based fees

Many subscription platforms charge a percentage-based fee on each transaction. This model scales as you grow. Smaller businesses pay less overall because they have fewer transactions, while larger businesses pay more because they have more transactions.

Additional service charges

Advanced features can also cost extra. These could include detailed analytics, custom reporting, or specialised integrations with third-party software. Some platforms also charge more for priority support, which might be appealing if you’re operating a high-volume business that requires fast response times.

Setup or onboarding fees

Certain enterprise-focused platforms charge a one-time setup fee for account configuration or specialised engineering support. This can make sense if you need white-glove service or custom integrations.

Maintenance and development

Even if a platform doesn’t explicitly charge for them, you might need to budget for developer hours or consulting to ensure your system is functioning as it should. Depending on your needs, you might also plan to customise your user portal, build specialised automations, or integrate with other business systems.

How can a subscription platform help reduce churn?

Churn is a constant concern for subscription businesses. Every cancelled membership represents lost revenue and often a disappointed or disengaged user. A well-designed subscription platform can help reduce churn by solving the issues that push subscribers to leave. Here’s how the right platform can help you manage churn.

Retention at the billing stage

Failed payments are a common cause of involuntary churn. If a subscriber forgets to update an expired card or if a bank blocks a payment for no clear reason, an automated process can alert the user, retry the charge, or provide a convenient, one-click update form. This can prevent unintentional drop-offs.

Easy plan adjustments

Many cancellations happen when subscribers are on a plan that doesn’t suit their needs. A flexible subscription platform includes easy ways for subscribers to downgrade or upgrade without losing data or incurring penalties. This flexibility can keep users from leaving entirely.

Personalised outreach

Platforms that track usage patterns and subscriber milestones provide you with the data you need to connect with customers in a targeted way. For example, if a subscriber hasn’t used a certain feature in two months, it might be time to send them an email about how that feature works or about a new use case. A gentle nudge can rekindle their interest, demonstrate the value of your product, and increase rates of retention.

Subscriber portals

When customers can manage their subscriptions independently – including updating payment details, checking invoices, or pausing a membership – they feel more in control. This can reduce frustration and prevent hasty cancellations.

Win-back tactics

Some subscription platforms create automated re-engagement campaigns when users want to cancel. A limited-time discount or a personal message can persuade someone to give the service another chance. Even if the campaign doesn’t succeed in keeping the subscriber, it can rebuild trust by making an honest effort to keep them.