Stripe: how to build a complex subscription system

Smart tools and smarter development are the answer. Building a winning subscription management system is about more than just processing payments. It’s about seamlessly managing the entire customer life cycle. That’s why we use platforms like Stripe. Stripe’s reliable yet flexible APIs provide the building blocks to deliver seamless subscription experiences, from sign-up and trial periods to upgrades, downgrades, and even cancellations.

In this guide, we’ll show you exactly how we do it, introduce you to the Stripe tools we love, and show you a real-world example of our work at EffectiveSoft.

Benefits of using Stripe

Setting up subscription management involves utilizing the entire features package that the payment solution offers. Here’s why Stripe consistently wins us over.

Developer friendliness

Stripe has all the documentation you could possibly need to integrate Stripe with custom solutions. It also has pre-built libraries in many different languages, so you can add the API to your original codebase without writing extra code. That’s a huge time-saver, especially when you’re working on something as complex as a subscription management system.

Testing environment

Stripe’s testing environment is a developer’s dream. Want to simulate a specific payment scenario without processing real money? No problem. Stripe provides test API keys right in the Stripe Dashboard, which you can use to generate and fetch simulated data to ensure flawless integration before you go live. And don’t forget the handy test card numbers—perfect for imitating different payment situations and finding bugs early on.

Various payment options

Stripe is more than just a payment gateway; it’s a comprehensive subscription management platform. It gives you the tools to handle the entire subscription life cycle with ease.

• Sign-ups and trials: Create frictionless sign-up flows and offer enticing trial periods to hook new customers.
• Flexible billing management: Easily handle recurring billing, prorations, invoices, and failed payments.
• Upgrades and downgrades: Let your customers upgrade or downgrade their subscriptions with a few clicks.
• Cancellations: Make the cancellation process as painless as possible while gaining insights into churn.

Global reach

Stripe makes it easy to expand your business globally and keep your customers happy no matter where they are.

• Selection of payment options: Stripe handles everything from traditional credit and debit cards to popular digital wallets like Apple Pay and Google Pay. It also supports bank debits, transfers, and a wide array of international payment methods to guarantee you can reach customers worldwide.
• Multicurrency support: Say goodbye to currency conversion headaches. Stripe allows you to process payments in over 135 currencies and counting. This means you can display prices in your customers’ local currency with no unnecessary fees, creating a smoother checkout experience.

Security first

When it comes to handling sensitive financial data, security is crucial. Stripe takes data protection seriously, offering multiple layers of security.

• Rock-solid encryption: Stripe uses the TLS protocol to ensure that all sensitive data, including credit card numbers and bank details, are encrypted during transmission.
• PCI compliance: Stripe system is fully compliant with the Payment Card Industry (PCI) data security standard, the highest level of security certification in the payments industry, so you know your customers’ data will be handled with the utmost care.
• Proactive fraud prevention: Stripe’s robust fraud prevention system, Stripe Radar, uses advanced machine learning algorithms to identify and block suspicious transactions. This helps safeguard your business and your customers from financial harm.

Subscription metrics monitoring

Stripe provides you with near-real-time insights into the key subscription metrics you need to make informed business decisions. Below are examples of the most critical metrics.

• Monthly recurring revenue (MRR): Tells you how subscription revenue is trending.
• Customer churn: Identifies why customers are leaving so you can take steps to improve retention.
• Customer lifetime value (CLTV): Helps you understand the long-term value of your customers and optimize your pricing and marketing strategies.

Stripe’s reporting dashboard also offers pre-built reports and customizable dashboards to give you a comprehensive view of your subscription business. You can even automate reports to be delivered right to your inbox, saving you time and effort.

Geographic limitations

Stripe is growing fast, but it’s not everywhere. Right now, it’s up and running in 46 countries, but not all features are available in all countries. Before you begin development, make sure Stripe is right for your target market and offers the features you need.

High costs

Stripe usually charges a fee for each transaction. This can be a pain for businesses with high transaction volumes but slim profit margins, like subscription services with affordable monthly plans. Those percentage-based fees can really eat into your profits, especially when you factor in additional costs for certain payment methods or currency conversions. It’s important to crunch the numbers to be sure Stripe’s pricing aligns with your business model.