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Why payments fail and how to recover them

Published 2 days ago • 1 min read

Episode #306

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​Beyond Retries: Why Payments Fail and How to Recover Them

Hi Reader,

How much of your churn from failed payments do you consider outside your control?

At Hotjar, we saw a lot of failures from cross-border transactions. Processing locally and in the customer’s local currency improved the chances of those payments going through.

The customer wanted to pay. How we collected the payment mattered.

This week, I spoke with Jack Cregan, founder of Paymend, about what actually happens when a payment fails, and why simply retrying it might not be enough.

A retry can send the payment back through the same processor and potentially run into the same problem. Paymend takes a different approach, giving failed transactions another route through its network of processors.

Their approach to insufficient funds was particularly interesting. They use card-network programs to monitor for new spending activity and use that as a signal for when to retry.

But recovering more payments creates another problem: what happens when a customer thinks their subscription has ended and suddenly gets charged again?

Jack walked me through the guardrails they use, including generally limiting recovery to a 30-day window.

If you’re already running dunning, the next question might not be how often you retry.

It’s whether you understand why the payment failed in the first place.

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​What to do with this?

  • Break down payment-related churn by the reason payments failed.
  • Check what changes between retries, including timing and processor.
  • Review how long recovery attempts continue and what customers are told.

This week's episode

EP306 | Beyond Retries: Why Payments Fail and How to Recover Them

Jack Cregan is the founder of Paymend, helping online businesses turn declined transactions into recovered revenue. Before Paymend, he co-founded and led Rebills, which he took from launch to exit in approximately two years.

Here’s what stood out:

  1. Why retrying through the same payment processor can leave the underlying problem unresolved — [00:08:18]
  2. Why subscription payments fail, from insufficient funds to cross-border issues — [00:10:37]
  3. How card monitoring and partial authorizations can help recover payments — [00:15:19]
  4. How much failed payment volume Paymend recovers, and what that number excludes — [00:18:54]​
  5. Why solving a critical infrastructure problem can make customers more likely to stay — [00:23:28]​
  6. Why Jack closely tracks each new customer’s first 60 days — [00:30:01]

Listen / watch: YouTube · Apple · Spotify​

One question for you

When did you last look at the reasons behind your failed payments?

Andrew

If you love the podcast and haven't already, please consider leaving us a review and feedback!

Andrew Michael

Host of Churn FM, the podcast for subscription economy pros to learn how the world's fastest-growing companies are tackling churn and using retention to fuel their growth.

34 Kimonos, Apartment 102, Nicosia, 2006
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CHURN FM

by Andrew Michael

Churn.fm is the podcast for subscription economy pros to learn how the world's fastest-growing companies are tackling churn and using retention to fuel their growth. Each week we share the top tips and advice from our episodes in this newsletter.

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