Have trouble with payment failures? You're not alone.

Payment failures are a pain for every business but are particularly frustrating for indie hackers and solopreneuers.

Payment failure churn usually happens by accident. Failing a payment could happen for any number of reasons:

• The user doesn’t have a payment method on file.
• The user’s card on file has expired.
• The user got a new credit card.
• The user’s card has insufficient funds.
• The user’s card was declined for some other reason.

When digging into involuntary churn within your business it’s helpful to understand the primary drivers for your user base. Examples of ways that you could cut your data to better understand your drivers include:

• By failure message - what is the failure reason the bank gave for why the payment failed?
• By currency - is there a particular currency that has lower success rates for you than others?
• By payment method - Is there a particular payment method type that has lower success rates? For example, users with a bank account tied to their subscription are less likely to fail a payment than someone with a card tied to their subscription.
• By funding type - do members that use certain types of cards (debit, credit, prepaid) have payments succeed at different rates?
• By user cohort - does the plan that someone signed up on make a difference? Maybe your $200 elite tier members fail payments more often than your $49 basic tier due to the higher price point.

So what can you do about it?

Approach involuntary churn with a user journey mindset. There are three primary steps when it comes to a payment failure user journey:

1. Before a user fails a payment
2. After a user fails a payment
3. After a user has churned

Steps you can take before a user fails a payment:

1. Use a payment processor that supports automatic card updates.
2. Proactively identify users that will likely have a payment issue and inform them ahead of time in your app ONLY.
3. Choose the payment methods you support intentionally. Not all payment methods are created equally. Prepaid cards, for example, have significantly higher payment failure rates.
4. Validate cards when a user updates them in the system.
   6.Require users to have a payment method on file.

Steps you can take after a payment fails:

1. Use automatic retries to recapture the failed payment.
2. Make the user aware they failed a payment via email, in app, SMS, etc..
3. Reduce friction in resolving payment failures.

I hope you found this helpful. If you have any questions, reach out to me on Indiehackers or on twitter @benlkatz.