When it comes to growing a subscription business, few things hurt more than churn. But not all churn is created equal. Some users leave on purpose (voluntary churn). Others leave by accident—maybe a payment fails or a card expires (involuntary churn). Both types chip away at your revenue, but they need different strategies to fix. And the platform you use to collect payments plays a big role in what kind of churn you see.
1. Stripe reports an average involuntary churn rate of 1.4% across SaaS businesses
What this means
If you’re using Stripe for your SaaS payments, you’re probably already ahead of the curve. Stripe’s infrastructure is built with tools that actively reduce churn, especially involuntary churn. Their automatic retries, smart dunning, and card update features help businesses keep customers paying even when issues arise.
But 1.4% is still real money walking out the door. For every 1,000 customers, that’s 14 lost simply due to failed payments—no bad experience, no product flaw, just backend issues.
What you should do
Start by tracking your own involuntary churn rate. Many founders don’t even know it. Go into Stripe Analytics and look at the “payment failures” section. Then compare those numbers to your monthly churn rate. If it’s near or above 1.4%, you have work to do.
Set up automated dunning emails using Stripe’s built-in options. These emails remind customers that their payment failed and guide them to fix it. But don’t stop there—write emails that sound human, not robotic. Test different timings. Some users respond better within 2 hours. Others need 24.
Also, review your retry logic. Stripe allows you to set up retries over a span of days. Use a staggered approach—retry on day 1, day 3, and day 7. Give customers time to get funds in their account.
And make sure the “card updater” feature is turned on. Stripe works with banks to automatically update expired cards behind the scenes. If you’re not using it, you’re leaving easy wins on the table.
2. PayPal’s involuntary churn rate can reach up to 4% due to billing agreement failures
Why PayPal can be risky
PayPal has its perks—brand trust, ease of setup, and wide usage. But it’s also known for higher billing failures. These typically come from customers disconnecting payment authorizations or PayPal suspending billing agreements. This leads to more churn that you can’t easily control.
Unlike Stripe, PayPal doesn’t have robust smart retry or auto-updater tools. Once a billing agreement is broken, the customer has to manually fix it.
How to address it
If you use PayPal as your main payment option, take extra steps to cushion this risk. First, always offer at least one backup payment option—like a credit card form or Apple Pay. Giving users a choice can significantly cut your overall churn.
Second, track billing agreement cancellations. You can use IPN (Instant Payment Notification) or webhooks to catch when a customer revokes billing. Once that event fires, immediately trigger a personal-sounding email offering help to reinstate their payment method.
You should also make it easier for customers to manage their billing settings in your app. Add a clear “Update PayPal Billing” button so users don’t have to fumble through PayPal’s interface. That extra step can lower friction and save accounts.
And lastly, educate your customers during onboarding. A short tip that explains how PayPal billing works and what they should expect in terms of renewals can avoid confusion down the line. Prevention is better than chasing lost users.
3. Voluntary churn for subscription businesses using Apple Pay averages 7.2% annually
What’s going on here
Apple Pay is fast, secure, and convenient. But its tight link to Apple’s ecosystem means user habits can be more volatile. Mobile-first users tend to churn faster unless they’re deeply engaged. That explains why annual voluntary churn hovers around 7.2%.
That’s not terrible. But it’s a clear sign that payment method isn’t the only thing that matters. Customer experience and retention tactics must be strong.
What to do
The first step is to know who your Apple Pay users are. Segment them. If your system doesn’t do that natively, pass a tag or payment label when users sign up.
Once you know them, analyze their in-app behavior. Are they less engaged? Are they canceling from mobile more often than desktop users? If so, you need to shift your retention efforts toward mobile. That could mean clearer in-app messaging, mobile-optimized onboarding, or push notifications that guide users to value faster.
Also, rethink how and when you ask for feedback. Many mobile-first customers churn quietly. A simple 2-question in-app survey before they cancel can give you clues—and give you a shot to win them back.
Finally, test personalized win-back campaigns for Apple Pay churners. You can identify them via their last used payment method, then send them a re-engagement message that aligns with how they paid. Maybe even offer them a one-tap Apple Pay restart. Reduce the friction, and they’re more likely to return.
4. Involuntary churn on Apple Pay is significantly lower at 0.9% due to tokenized payments
Why tokenization matters
Apple Pay uses tokenization—meaning the actual card details aren’t shared. Instead, a secure token is used and remains active even if the physical card changes. That’s why failed payments from expired or replaced cards are rare.
A 0.9% involuntary churn rate is one of the lowest among all platforms. That’s a big advantage for businesses focusing on recurring billing.
How to maximize this edge
First, promote Apple Pay as a preferred option—especially for mobile users. On checkout pages, highlight it as the easiest and most secure. Consider nudging existing users to switch to Apple Pay if they’re using a more failure-prone method like PayPal or credit cards.
Second, make sure your system supports one-tap reactivation for Apple Pay users whose subscription has lapsed. Since the token is persistent, the reactivation can happen instantly without re-entering payment details.
Also, when a failed payment does happen through Apple Pay (which is rare), prioritize those accounts. A user losing access despite using such a reliable method usually signals a deeper issue—maybe they’ve removed the card or changed Apple ID settings. Reach out personally and walk them through restoring access.
And don’t forget about the optics. Add trust-building copy around Apple Pay like “never worry about card expiry” to reduce objections at sign-up. It helps set expectations and reinforces your reliability.
5. Google Pay users show a voluntary churn rate of 6.5%, with involuntary churn around 1.2%
What’s happening with Google Pay
Google Pay has been rising in adoption, especially in Android-heavy markets. It offers a fast, contactless, and secure way to pay. But even though it performs better than traditional credit cards when it comes to involuntary churn (only 1.2%), voluntary churn is still quite noticeable at 6.5%.
This pattern likely ties into user engagement habits. Many Google Pay users sign up through app stores or mobile-first channels, where brand loyalty is lower and trial fatigue is higher.
How to handle this
To lower voluntary churn, you need to focus on increasing perceived value early. Google Pay users, like Apple Pay users, often convert quickly—but if they don’t see value immediately, they cancel just as fast.
Set up an onboarding flow that recognizes Google Pay users. You can tailor messaging like “Welcome! Your Google Pay subscription is active. Here’s how to get the most from your membership today.” This slight change makes it feel more personal and relevant.
Second, look at your retention checkpoints. What happens between day 1 and day 30? Are you showing clear progress, milestones, or rewards? If not, add them. Time-bound nudges and small achievements can anchor commitment.
On the involuntary side, 1.2% isn’t terrible, but you can still reduce it. Use Google Pay APIs to check if payment authorization is still valid before renewal. If it’s not, prompt the user in advance—via SMS or email—to take action.
Also, consider adding a prompt inside your app or dashboard before renewal dates: “Check your Google Pay settings to avoid billing issues.” It’s low effort and saves revenue.
6. Credit card-based payments see involuntary churn rates between 2–5% depending on card issuer
Why this is a red flag
Credit cards are still the default payment method for many online businesses. But they come with the highest involuntary churn rates in the game—anywhere from 2% to 5%, depending on which bank issued the card and whether it’s debit, credit, or prepaid.
This means for every 100 customers, up to 5 might be lost due to avoidable issues like expiration dates, fraud blocks, or card replacements.
What you can do today
Start by collecting detailed data on why each card payment fails. Use your processor’s logs to break down the types: “insufficient funds,” “expired,” “blocked,” etc. Over time, patterns will appear—like certain issuers failing more often.
Next, implement a multi-stage dunning process. This is more than just retrying cards. It includes email reminders, SMS alerts, and even in-app banners telling customers their payment needs attention. Don’t just say “payment failed”—explain why and how to fix it.
Offer alternative payment methods too. Let people switch from cards to ACH, Apple Pay, or PayPal without hassle. The more flexibility, the better your chances of recovery.
Another trick: show payment health status on user dashboards. Let customers know when their card is about to expire or a payment was retried. This transparency builds trust and improves reaction speed.
And for high-value customers, go personal. Send a concierge-style email or even a phone call if their payment fails. That one action can save a long-term subscription.
7. Businesses using Stripe’s automatic card updater reduce involuntary churn by up to 47%
This tool is your secret weapon
Stripe’s automatic card updater connects directly with card networks and banks to silently update expired or replaced cards behind the scenes. That means users never even know there was an issue—and you don’t lose revenue.
This one feature can cut involuntary churn nearly in half, especially in B2C and subscription-heavy businesses.
Here’s how to use it properly
First, make sure it’s turned on. It’s usually enabled by default in Stripe, but double-check your account settings under “Billing” and “Smart Retries.”
Once it’s active, track its usage. Stripe lets you see how many card updates it processed in your dashboard. If it’s low, that could mean many of your customers use non-supported cards—or worse, you’re losing customers without knowing why.
Educate your team about it too. Customer support should know to explain it to confused users: “Good news—your new card was already updated automatically. You’re all set.” It adds polish to your user experience.
But don’t rely on the updater alone. Pair it with smart retry logic and dunning messages. For example, if a payment fails even after updating, follow up with a helpful and timely email. Something like: “We updated your card, but your bank still blocked the charge. Let’s fix it here.”
And finally, use this feature as a trust signal. Mention on your pricing page that you use secure, auto-updating billing so customers never lose access. It reassures buyers and lowers anxiety during checkout.
8. ACH-based payment platforms like Plaid see involuntary churn as low as 0.3%
Why ACH is the silent champion
ACH (Automated Clearing House) payments move money directly from bank account to bank account. No card numbers. No expiration dates. No chance of accidental decline due to fraud systems or blocked charges.
That’s why platforms using ACH—especially those integrated with Plaid—experience an incredibly low involuntary churn rate: just 0.3%.
How to switch or support it
If you’re only offering card payments, start adding ACH. Tools like Plaid, Stripe ACH, and GoCardless make it simple. You can embed them in your checkout process as another option. Even better, offer ACH as a discounted payment method to encourage uptake. Saving 1–2% in fees is a win for you and the customer.
Set up messaging for large customers or long-term subscribers: “Want to avoid card issues and save on fees? Try our bank transfer option.” It sounds like a bonus, but you’re really securing recurring revenue.
Also, review your onboarding. Most ACH forms require micro-deposit verification or Plaid login. This can scare off users. So, simplify the UX. Add tooltips. Reduce form fields. Reassure them it’s safe.
One advanced tactic: push ACH upgrades after a failed card payment. When a card fails, suggest: “Switch to bank payments for uninterrupted access.” It’s a smart way to reduce churn right when the user is frustrated.
And monitor ACH success rates. Even though failure is rare, it can still happen if the bank account is closed or blocked. Set up fallback alerts and communicate fast if this happens.
9. Platforms relying on PayPal experience a 25% higher involuntary churn than those using Stripe
Why this gap exists
While both PayPal and Stripe are leaders, their handling of recurring payments is different. PayPal depends heavily on the user authorizing a “billing agreement,” and once broken, that connection can’t be automatically fixed. This leads to higher involuntary churn—on average, 25% more than Stripe-powered businesses.
Stripe, on the other hand, works directly with banks and card networks to recover payments behind the scenes.
How to bridge the gap
First, do not rely on PayPal alone. Always offer at least one additional payment option—and encourage users to choose it if your data shows better retention.
Look into your PayPal churn reasons. Is it revoked agreements? Chargebacks? Payment blocks? Use that insight to tailor responses. For revoked agreements, follow up fast with easy-to-follow re-subscription links.
You can also create email triggers based on PayPal API events. For example, if a billing agreement is canceled, send a message like: “Looks like PayPal had a hiccup. Click here to restore your subscription in one tap.”
Make PayPal users feel cared for. Many involuntary churns happen not because they want to leave, but because the fix was too hard. Simpler flows and faster response time reduce that pain.
Lastly, measure PayPal churn separately from other methods. It’s not about abandoning PayPal—it’s about knowing where you lose money and tightening the holes.
10. Churn due to failed payments accounts for 20–40% of total churn in many B2C SaaS businesses
The hidden monster in your churn metrics
When most teams look at churn, they focus on why users cancel. They try to improve onboarding, add features, or build a better customer success team. But in B2C SaaS, a huge chunk of churn—up to 40%—isn’t due to product issues. It’s failed payments.
That’s what makes involuntary churn so dangerous. You don’t even get the chance to fix it. The user often doesn’t realize the payment didn’t go through, and they churn without knowing.
How to tackle this strategically
First, break out your churn reporting into two distinct buckets:
– Voluntary: users who cancel themselves
– Involuntary: users who disappear because payments failed
If you’re not doing this, you’re flying blind. Most billing platforms like Stripe and Chargebee can show you these numbers. If you’re not sure where to find them, ask your developer to tag churned users with a “canceled” or “payment failed” reason in your analytics tool.
Once you know your breakdown, make involuntary churn your first win. It’s easier to fix than voluntary churn. You don’t need to change your product—you just need to improve how you handle billing.
Set up clear retry logic. Don’t just try once and give up. Try the payment again after a day, then three days later, and once more after a week. Make each retry smarter by watching for card updates or bank activity.
Next, focus on communication. Don’t rely on a single email that says, “Your payment failed.” Send a sequence. Try email, then SMS, then in-app. Each message should focus on helping—not scaring—the customer. Say things like: “Looks like your card needs a quick update. You’re one click away from staying on track.”
And last, track what’s working. Monitor how many customers recover after each step: the first retry, the first email, the second message. That shows you where to double down.
11. Amazon Pay users exhibit a voluntary churn rate of 5.9% and involuntary churn near 0.7%
Amazon’s smooth payment ride
Amazon Pay has grown slowly but steadily in the recurring payment space. Its edge? A rock-solid infrastructure that almost never fails on renewal. The involuntary churn rate of just 0.7% is among the lowest across platforms. Voluntary churn is also on the low side at 5.9%.
This makes Amazon Pay ideal for customers who want reliability and low friction.
How to take advantage
If you serve a tech-savvy or retail-heavy audience, offering Amazon Pay could give you a boost. Especially for users who already have their cards linked with Amazon and prefer not to share details elsewhere.
Promote it as the “frictionless checkout” option. Highlight that it uses the same credentials as their Amazon account, so there’s nothing new to set up.
You can also use Amazon Pay strategically for renewals. If a user’s main card fails, offer a one-click fallback to Amazon Pay: “Use your Amazon account to stay subscribed in seconds.” It feels easy and secure.
To reduce voluntary churn, treat Amazon Pay users like premium customers. Their trust in Amazon translates into higher standards. Make your renewal reminders, post-purchase emails, and success messages as smooth and polished as Amazon’s own experience.
And if you’re not using Amazon Pay yet, test it. Start with a small slice of your checkout flow and measure whether those users churn less over time. If the numbers hold, roll it out across the board.
12. Payment retries reduce involuntary churn by 33% on platforms with built-in smart dunning
Why retries are critical
Many failed payments don’t happen because the card is dead—they happen because of temporary issues. Maybe the account had insufficient funds. Maybe the bank flagged it for review. A retry one day later could go through without a hitch.
That’s why smart retry logic—also called “dunning”—can save up to one-third of failed payments.
What to implement now
Start with your retry schedule. Don’t guess. Use data. Most platforms recommend retrying at these intervals:
– Day 1 (immediately after failure)
– Day 3
– Day 7
– Day 14
That spacing covers both short-term funding issues and bank delays. But make sure your retries are “smart.” Some platforms like Stripe Smart Retries or Chargebee’s Retry Settings can analyze payment metadata and pick the best time to retry based on issuer signals.
Now, layer on communication. Send a helpful reminder right after the first failed attempt. But don’t overwhelm people with constant emails. Instead, time your messages to follow the retry pattern.
Each email should include a working payment link. Keep it short and helpful: “We couldn’t renew your subscription, but you can update your info here. No interruption, just 10 seconds.”
Finally, test your subject lines. Messages about payments often go unopened. Try different copy like:
– “Quick fix to keep your subscription active”
– “Heads-up: your card needs a quick update”
– “One click to avoid losing access”
Even a small bump in open rate can mean thousands in recovered revenue.
13. Churn rates for Apple Pay users under 30 are 15% lower than for traditional card users
Younger users stick longer—if you make it easy
This stat says a lot. Younger subscribers using Apple Pay are not only signing up more—they’re staying longer. That’s likely because they enjoy how easy, fast, and secure it is. No typing. No manual card updates. No worry.
The 15% drop in churn is meaningful. It shows that reducing friction leads to retention.
How to capitalize
If your user base includes a younger demographic—under 30 especially—make Apple Pay front and center. Don’t just add the button at checkout. Feature it. Use a “Sign up with Apple Pay” callout. Highlight benefits like “No card required” and “Instant renewal.”
During onboarding, tell users they’ll never have to worry about failed payments if they choose Apple Pay. That reassures users and subtly reduces churn from the start.
If your app is mobile-first, consider offering a faster sign-up flow for Apple Pay users. Skip extra forms. Pre-fill where you can. Let them get into the product faster. These small UX wins build a stickier relationship.
Also, track your Apple Pay users separately. Monitor how they engage and when they churn. If you spot a churn spike, you’ll know whether it’s tied to the product or just the payment behavior.
Lastly, pair Apple Pay with personalized win-back flows. If a user does churn, retarget them with messaging like: “Restart your subscription with Apple Pay in one tap.” Simplicity is your best retention tool.
14. Involuntary churn from prepaid cards is 3.5x higher than from debit cards
Why prepaid cards are high-risk
Prepaid cards often have limited balances, short expiration dates, and weak fraud protection. That makes them a minefield for recurring billing. Users might sign up with a prepaid card for a free trial, then forget to reload it. Or they might use it as a burner to avoid future charges.
As a result, involuntary churn from prepaid cards is 3.5 times higher than from regular debit cards.
What to do about it
First, detect prepaid cards at checkout. Many payment platforms can flag card types in real time. If someone enters a prepaid card, show a small prompt: “Some prepaid cards may not support recurring billing. We recommend using a debit or credit card for uninterrupted access.”
Second, monitor the performance of prepaid users. What percentage of them churn within 30 days? How many payments actually go through? If prepaid users make up a small chunk of MRR but a big chunk of churn, reconsider allowing them.
If you must support prepaid cards, set shorter billing cycles. Monthly plans are easier for users to maintain than annual ones. And send reminders before renewal: “Make sure your card is loaded to stay active.”
One last idea: offer incentives to switch. After signup, show a message like: “Want to avoid payment interruptions? Add a backup card or switch to bank payments for bonus credits.” Even a small incentive can reduce risk.
15. Subscription platforms using dunning emails reduce involuntary churn by up to 40%
Dunning isn’t dead—it’s vital
Dunning emails are reminders you send when a payment fails. But not all dunning is equal. A simple message like “Update your card” won’t get the job done. Strategic, well-timed, helpful emails can cut churn by up to 40%.
That’s massive. And it’s easy to implement.
Build a high-converting dunning flow
Start with tone. Your email should feel like a helpful heads-up—not a punishment. Use subject lines like:
– “We saved your spot—just need a quick fix”
– “Quick heads-up: your card didn’t go through”
– “Keep your account running—update in one click”
Send your first email right after the first failed charge. Then follow up with a second message 3 days later. If payment still hasn’t gone through, send one final reminder on day 7 with a clear CTA.
Each message should include:
– The reason for the failure (if known)
– A link to update the payment
– Reassurance they won’t lose progress or data
Use personalization. Include the user’s name. Reference their plan. If you can, show how much value they’ve gotten—like number of logins or saved projects.
And test everything. Subject lines. Email timing. Button copy. Small tweaks can make a big difference in open and click rates.
Done right, dunning emails become more than reminders—they become your recovery team.
16. PayPal transactions have a higher rate of billing agreement revocations (2.8%) leading to churn
When customers cut the cord themselves
Unlike card processors like Stripe, PayPal uses “billing agreements” for recurring payments. These are authorizations that users can cancel from their own PayPal account—no need to contact you. That means if they’re frustrated, forget who you are, or feel unsafe, they can cancel with one click.
And that’s happening more than you think—2.8% of all PayPal billing agreements get revoked, often without warning. That’s a hidden churn engine.
How to reduce the fallout
First, improve your brand visibility during the PayPal transaction flow. When users go to PayPal to approve a subscription, make sure your company name and product name are clear and recognizable. If your branding is vague or mismatched, users might forget what they signed up for and cancel out of caution.
Second, remind customers what they’re subscribed to. A well-timed email that confirms the PayPal agreement and explains what they’ll get each month can build confidence. Something like: “Thanks for subscribing via PayPal! You now have full access to [benefit]. Here’s how to make the most of it.”
You should also set up alerts for revoked agreements. PayPal’s Instant Payment Notification (IPN) system can tell you in real time when someone cancels their billing agreement. As soon as that happens, fire off an email or in-app message: “We noticed your PayPal subscription was canceled—want to stay on board? Click here to reactivate.”
And finally, test asking users during onboarding if they’d prefer to switch to a more stable method like card or ACH. A simple message like “Want to avoid PayPal issues? Add a backup payment method” gives you a better shot at retention.
17. Platforms offering multiple payment options see 13% lower voluntary churn
Choice creates confidence
Some users trust Apple Pay. Others swear by PayPal. Some prefer the old-fashioned card. And some—especially larger businesses—want to pay via ACH. The more options you offer, the more likely a customer is to pick one they’re comfortable with. That comfort leads to fewer cancellations down the line.
That’s why offering multiple payment methods results in 13% lower voluntary churn, on average.
How to expand your payment options wisely
Start with data. Look at your current churn breakdown by payment method. Are card users churning more than Apple Pay users? Are PayPal subscribers sticking around longer? This gives you insight into where your friction is.
Next, expand your payment stack. Ideally, you should support:
– Cards (credit and debit)
– Apple Pay or Google Pay
– PayPal
– ACH (via Plaid, GoCardless, or Stripe ACH)
But don’t overwhelm users. At checkout, show the top 2–3 most relevant options based on device and region. You can also run A/B tests: offer Apple Pay only to iOS users and PayPal only to certain countries. Measure what converts and retains best.
Also, add a payment method switch option inside your app. That way, if someone starts with PayPal but wants to move to a more stable method later, they can. Make it easy.
And most importantly, explain the benefits of each. Let users know which options offer the fewest payment failures or which are fastest to set up. That builds trust and leads to smarter customer choices—reducing future churn risk.
18. Churn due to expired cards accounts for 30% of involuntary churn in card-based platforms
Expired cards are sneaky churn killers
Customers don’t get emails from their bank saying “Your card will cause you to lose your subscription.” So they don’t realize that an expired card could mean losing access to a product they rely on.
That’s why up to 30% of involuntary churn in card-heavy systems comes from simple expiration issues.
How to get ahead of this
Your billing platform should already be flagging soon-to-expire cards. If not, switch to one that does. Stripe, Recurly, and Chargebee can identify cards expiring in 30–60 days.
When you spot these, reach out with a helpful message:
– “Heads-up: Your card expires soon—update now to keep your subscription uninterrupted.”
– “We noticed your card is expiring soon. It’s easy to update—just tap here.”
Timing matters. Don’t wait until the day before expiry. Send the first message at 60 days, then again at 30 days, then 7 days before.
Also, make the update process frictionless. Link directly to a secure page where they can edit their payment info without logging in again. If your flow is clunky, users will give up—and that’s money lost.
Better still, use card updaters. Stripe and other providers work with networks like Visa and Mastercard to automatically refresh expired cards. Make sure this is enabled, and monitor how many cards are being updated. If that number is low, look into why—your users may be using unsupported banks or prepaid cards.
And finally, use it as a trust touchpoint. Let users know you’re working behind the scenes to keep their account active. It’s a small thing that builds big loyalty.
19. Stripe Radar reduces fraud-related involuntary churn by 22%
Preventing false declines saves real revenue
Sometimes, a payment fails not because it’s bad—but because it looks suspicious. That’s especially true for international transactions, large renewals, or cards issued in high-risk countries. Stripe Radar helps with this by detecting and allowing good payments to go through while blocking the truly risky ones.
Using Stripe Radar can reduce fraud-related involuntary churn by 22%. That’s a big deal.
How to put Radar to work
If you’re using Stripe, you already have Radar—at least the basic version. But are you using it correctly?
Start by checking your fraud rules. Are you blocking too many transactions because of tight thresholds? A falsely blocked payment is just as bad as a failed one—it means a loyal customer suddenly can’t pay.
Review your “blocked payments” tab inside Stripe. Look for signs of legitimate transactions being stopped. Were they from long-time customers? Were they on normal devices or networks? If so, loosen your rules slightly or create custom allow-lists.
Next, enable Radar’s machine learning mode. It adapts over time to your customer base and adjusts its risk scoring to fit your needs. This leads to fewer false positives.
You can also set up alerts. If a payment is flagged but not blocked, notify your team. That way, you can manually review and approve it—especially for high-value accounts.
And finally, communicate clearly with users whose payments are flagged. Say things like: “Your bank flagged this payment—we’re here to help. Click here to try again or update your card.” Don’t let fraud filters become churn machines.
20. Businesses with monthly billing cycles have 1.7x higher voluntary churn compared to annual billing
The short-term trap of monthly plans
Monthly billing sounds great for cash flow. It’s flexible, easy to sell, and feels low risk to new users. But it’s also churn-prone. Users reassess every 30 days whether they still need you. That leads to higher voluntary churn—1.7x more than annual plans.
Annual billing, on the other hand, locks in revenue for longer and reduces the number of cancellation decision points.
How to encourage long-term billing
If you’re only offering monthly plans, start by testing annual pricing. Add it to your pricing page with a clear savings message: “2 months free when you go annual.”
Then, offer in-app upgrades. After a customer completes their second or third successful monthly payment, prompt them: “Switch to annual and save $X this year.” These prompts work best when timed after a positive product experience—like completing a key action or hitting a milestone.
You can also offer partial refunds or account credits for switching mid-cycle: “Apply your current balance toward an annual plan—no double billing.”
To make it easier for hesitant users, introduce a 30-day refund guarantee on annual plans. That removes the risk and increases adoption.
And don’t forget the hidden benefit—annual plans mean fewer payment failures. That reduces involuntary churn too. One billing event per year = fewer opportunities for cards to decline or accounts to lapse.
21. Digital wallets (Apple Pay, Google Pay) see 20% lower involuntary churn than cards
Wallets make payments smoother—and more reliable
Cards expire. They get lost. They get replaced when banks update fraud protections. All of this makes recurring payments fragile. But digital wallets like Apple Pay and Google Pay use tokenized, secure payment methods that aren’t tied to physical cards. That means fewer interruptions—and 20% lower involuntary churn.
It’s not just about convenience—it’s about payment durability.
How to increase wallet adoption
Start by surfacing digital wallet options where they’re most likely to be used: on mobile devices. Don’t hide Apple Pay or Google Pay behind “more options.” If a user is on an iPhone, show the Apple Pay button first. If they’re on Android, prioritize Google Pay.
Explain the benefit clearly: “Use Apple Pay for faster signups and fewer billing issues.” That line sets expectations and gives users a reason to choose the more reliable option.
Next, offer wallet-based reactivation. When a payment fails, detect whether that user has a device that supports Apple Pay or Google Pay. Then show a one-click reactivation button: “Restart with Apple Pay.” Reducing friction at this point can recover accounts instantly.
Segment your users by payment method. Monitor churn across wallets vs cards. If wallets perform better, consider encouraging users to switch. Send an email or in-app message: “Want fewer billing issues? Switch to Apple Pay in 10 seconds.”
And remember, wallets build trust. Some users don’t like typing card info. They trust their mobile wallet to protect them. Supporting that preference builds long-term loyalty—and reduces accidental churn.
22. Failed payment resolution within 48 hours lowers involuntary churn by 60%
Time is your greatest weapon
When a payment fails, the clock starts ticking. The longer you wait to resolve the issue, the less likely you are to get that customer back. But if you act within 48 hours, your chances go way up—reducing involuntary churn by 60%.
It’s not just about retries. It’s about response. Most customers don’t even know their payment failed until they lose access or get an email. Fix that, and you’ll save a ton of revenue.
What to implement
Set up instant alerts the moment a payment fails. Your billing platform should trigger these. Use that signal to send a helpful email within minutes. Keep it human: “Hey [Name], looks like your payment didn’t go through. It happens. You can fix it here in 10 seconds.”
Then, follow up with a second message the next day. Maybe a text message or push notification: “Quick reminder—your payment failed. You can update your info now and keep your access.”
Use urgency without pressure. Let customers know they have time—but not too much. Something like: “Your spot is reserved for 24 more hours—update now to keep everything running.”
Track recovery rates at each touchpoint. Which message gets the best response? Which payment methods recover fastest? This data helps you refine your timing and tone.
And for high-value customers, add personal follow-up. A manual email from your team (or even a call, if appropriate) can save large accounts that would otherwise churn without a sound.
Think of this like CPR for your billing. If you respond fast, you can bring a customer back before the account flatlines.
23. Platforms using AI-driven dunning recover 70% of failed payments
Smarter dunning, better recovery
Most businesses use static dunning: one email goes out after a failed charge, maybe a retry a few days later. But AI-driven dunning takes a smarter route. It looks at each customer’s behavior, payment history, and even card metadata to decide when and how to retry or message them.
And it works—recovering up to 70% of failed payments.
How to start using AI in your dunning flow
If you’re on a platform like Stripe, Chargebee, or Recurly, check whether you have access to AI-driven dunning tools. These platforms often have built-in options or integrations with tools like Churn Buster or Retain.
Once you’ve enabled it, monitor how the AI handles retries. It might retry payments at different times of day, avoid weekends, or wait for salary periods to pass. This personalization improves success rates without annoying the customer.
Now, look at how emails are being sent. Some tools adjust subject lines or send times based on open behavior. Make sure you’re not overriding this with a fixed template.
Even if you’re not using AI, you can simulate some of it. Tag customers by time zone and retry during their business hours. Adjust your copy based on user type—first-time subscriber vs long-time user. Add smart links that pre-fill account details so the update takes seconds, not minutes.
The key is this: treat every failed payment like a data point. Learn from it. Automate recovery steps based on what’s worked for others. You don’t need to guess—let smart systems guide the process.
And when you recover a payment, follow up. Say thank you. Let the customer know everything is back on track. That builds confidence—and makes them more likely to stay.
24. Voluntary churn is 18% higher on platforms that don’t offer in-app cancellation saves
You lost them—and didn’t even try to stop it
When users click “Cancel,” they’re sending a signal. But most businesses treat that signal as the end of the road. They show a basic confirmation screen and call it a day. No message. No offer. No second chance.
Platforms that don’t offer any kind of save offer at cancellation see 18% more voluntary churn. That’s not a product issue—it’s a retention issue.
What to add at the cancellation point
Introduce a save flow. This is a short set of steps triggered when a user tries to cancel. Ask a simple question: “Why are you leaving?” Offer 3–5 choices, such as:
– Too expensive
– Not using it enough
– Found an alternative
– Technical issues
Then, show a tailored response. For “Too expensive,” offer a discounted plan or a pause option. For “Not using it,” offer a product tour or usage tips. For “Technical issues,” show a fast way to contact support.
This small moment creates friction—the good kind. It makes users stop and think. It makes them feel seen. And often, it makes them stay.
Even if only 10% of users change their minds during this flow, you’ve reduced churn without touching the rest of your product.
If you don’t want to build it yourself, use tools like ProfitWell Retain or Churnkey. They plug into your billing system and give you instant cancel flow control.
And don’t forget to test. Try different save messages. Experiment with humor. Offer a callback from a success manager for large accounts. See what works—and scale it.
In-app saves don’t feel pushy when done right. They feel like good customer service. And they can keep your revenue intact.
25. Companies using payment recovery tools like Churn Buster see 40–50% reductions in involuntary churn
Specialized tools make a real difference
You might think your billing platform is doing enough. It retries payments. It sends emails. But that’s just the beginning. Dedicated payment recovery tools like Churn Buster, Stunning, or Retain go deeper—and companies using them see up to 50% less involuntary churn.
These tools focus entirely on saving failed payments and winning back customers who would otherwise be lost.
What recovery tools actually do
First, they give you control. Instead of a generic “retry in 3 days,” you get logic like: “Retry this customer at 2 p.m. in their time zone on payday.” That level of detail matters.
Second, they improve email strategy. You can write tailored messages based on user history. You can track opens and clicks. You can A/B test subject lines and buttons. The goal isn’t just to inform—it’s to convert.
Third, they provide better analytics. You’ll know exactly how much revenue you recovered last week, which emails worked, and where payments failed. That insight lets you improve over time.
Most tools also offer white-label features. Your recovery emails look like they’re coming from you—not a random third party. That builds trust and increases response rates.
Setup usually takes a few hours. You connect your billing system (like Stripe), import your branding, and write a few email templates. After that, the tool takes over—monitoring, retrying, and messaging on your behalf.
If you’re losing even 1% of revenue to failed payments, a recovery tool pays for itself fast. Don’t wait until churn becomes unmanageable. Automate your saves, and watch retention climb.
26. High-risk merchant accounts show involuntary churn of up to 6.8%
The risks of being labeled “high-risk”
If your business falls under the “high-risk” category—think crypto, CBD, dating apps, adult content, or even online coaching—you’re likely paying more in fees. But that’s not the only issue. You’re also facing much higher involuntary churn, sometimes up to 6.8%. That’s more than 4x what stable industries experience.
This happens because high-risk accounts get more failed payments, more bank blocks, and more fraud-related declines.
How to navigate this challenge
First, if you’re in a high-risk industry, accept that your churn profile is different. You’re not broken—you’re just playing a different game. And that game requires tighter controls.
Start with processor selection. Not all payment gateways treat high-risk merchants equally. Stripe, for example, doesn’t support many high-risk categories, while processors like Authorize.Net, NMI, and PayKings specialize in them.
Choose a gateway that offers smart retries, card updater tools, and advanced fraud detection. You need every edge you can get.
Second, use proactive communication. High-risk users often get caught off guard when payments fail. They think their bank is at fault. Send a heads-up: “Some banks may block this transaction type—here’s how to resolve it.” That small message can prevent confusion and lost trust.
Next, offer multiple payment options. If one fails, give users a fallback. That might include PayPal, crypto, or even manual invoice payments.
And monitor failed payments closely. Set up alerts for spikes in declines. A sudden jump could mean your processor flagged your account or banks changed risk thresholds.
Lastly, consider monthly billing over annual for these users. The shorter cycle keeps revenue flowing and reduces the impact of failed renewals.
In high-risk businesses, churn control is a daily battle—but it’s winnable with the right systems.
27. Voluntary churn from PayPal users rises by 30% in regions with frequent currency conversion fees
Fees cause friction—and friction causes churn
PayPal is widely used in international markets, but not without problems. One major issue is currency conversion. If your product is priced in USD and your customer pays in EUR, INR, or JPY, PayPal often adds a hefty conversion fee—and doesn’t always explain it clearly.
Customers see unexpected charges, feel misled, and cancel. That leads to a 30% spike in voluntary churn in regions where conversions are frequent.
How to address the issue
First, be transparent. If you serve international users, add a message at checkout: “Your bank or PayPal may apply a small conversion fee if your currency differs from USD.” It sounds simple, but it sets expectations.
Second, test showing prices in local currency. Many platforms allow this through plugins or API integrations. Displaying prices in EUR, GBP, or INR builds confidence and reduces sticker shock.
If you can’t support multiple currencies, at least show an estimated conversion. Something like: “Estimated: €8.74 (based on current exchange rates)” next to the $9 price tag.
Also, offer alternatives. Stripe, Apple Pay, and Google Pay tend to handle international transactions more cleanly, with lower or no fees. Let customers choose.
For current PayPal users in high-fee regions, reach out. Send a friendly message: “Want to avoid extra charges? Here’s how to switch to a lower-fee method.” Provide a direct link to update their payment type.
Finally, monitor churn by country. If you see spikes from places like Brazil, India, or parts of Europe, dig into your PayPal reports. Fee-related frustration could be your hidden churn driver.
28. Stripe merchants using Smart Retries average a 14% boost in payment recovery
Smart retries are smarter for a reason
When a payment fails, most systems retry after a fixed number of days. But Stripe Smart Retries uses machine learning. It analyzes when banks are most likely to accept charges based on thousands of signals—like card type, location, and past behavior.
The result? A 14% increase in successful recoveries compared to static retry schedules.
How to activate and use this feature
If you’re using Stripe, turn on Smart Retries in your “Billing” settings. It works out of the box—no coding required. But just activating it isn’t enough. You need to monitor it.
Check your dashboard for recovery rates. Are retries happening at odd times? That’s okay—it means Stripe is optimizing for the best chance of success, not just standard timing.
Pair this feature with dunning messages. If Stripe retries the charge at 2 a.m. local time and it still fails, follow up with a message that lands in their inbox by morning. The retry gets the payment, the message gets the update if needed.
Also, analyze the cards being retried. Are they all debit? Do you have patterns by region? If Smart Retries keeps failing on a certain bank’s cards, consider blacklisting or flagging them for manual review.
One more tip: let your customers know that you have “automated retry protection” on your side. It’s a subtle signal of professionalism and gives them peace of mind that you’re not just relying on dumb systems.
In the background, Stripe Smart Retries is working to save you money every single day. Make sure it’s turned on—and supported by smart messaging.
29. Payment failure from bank-issued credit cards occurs 3.1% more often than with debit cards
Credit cards aren’t always better
We tend to think of credit cards as more reliable than debit cards. But when it comes to recurring payments, bank-issued credit cards fail 3.1% more often. That’s often due to fraud prevention, low limits, or unused cards being closed.
Debit cards, tied directly to accounts, are usually more stable—especially in domestic billing.
How to use this insight
First, identify the mix of cards your users are using. Most processors can show this. If a large portion of your failed payments are from credit cards, dig deeper. Are they from one particular bank? One region?
Next, during signup, consider nudging users to use debit cards for lower failure risk. A message like: “For uninterrupted billing, we recommend a debit card linked to your main account.”
Also, let users know if a card is about to expire—or has failed once already. Encourage them to add a backup card. Offer an incentive if needed: “Add a backup payment method and get a $5 credit.”
Monitor long-term data. Which card types result in longer retention? Which fail the most often? Adjust your targeting and user prompts accordingly.
And if you’re seeing high failure rates from credit cards, test offering ACH or wallet payments. These options often have better long-term reliability—and lower churn.
Sometimes, chasing credit card users looks good up front but costs you on the back end. Now you know why.
30. Subscription platforms using SMS reminders reduce payment-related churn by 25%
Sometimes, email just isn’t enough
When a payment fails or a card is about to expire, email is usually the first line of defense. But emails go unopened. They land in spam. Or they get buried in a crowded inbox. That’s where SMS comes in.
Platforms using text reminders see a 25% drop in payment-related churn. It’s simple, direct, and immediate.
How to implement SMS reminders
First, get permission. Ask for a phone number at signup and include a checkbox: “Get text updates about billing and subscription status.” Keep it clear and optional—but highlight the benefit.
Second, pick the right moment. Don’t send a text for every small thing. Focus on:
– Payment failed alerts
– Card expiring soon
– Successful reactivation confirmations
Keep your SMS short and friendly. For example:
– “Hi [Name], we couldn’t process your payment. Tap here to update your info and keep your subscription active.”
– “Quick heads-up: your card is expiring soon. Avoid interruptions by updating it here.”
Use short links to your billing page. Avoid too much text or branding. SMS should feel personal—not like a marketing blast.
Also, track the results. Use tags or UTMs to see how many people recover payments through SMS clicks. If it’s working, scale it.
Finally, combine SMS with email and push notifications. Don’t rely on one channel. Meet your customers where they are—on their phones, in their inbox, or in your app.
SMS isn’t just a reminder tool—it’s a revenue protector. Use it wisely, and you’ll keep more customers active every month.
Conclusion
Churn is inevitable—but avoidable in many cases. The platform you choose, how you handle payment failures, and the way you communicate during billing hiccups all shape your revenue retention.
Voluntary churn comes from user dissatisfaction. Involuntary churn comes from silence, confusion, and failed systems. Both can be tackled with better design, better messaging, and better tooling.
