What is Subscription Billing Technology?

Some of the largest nonprofits in the world point to robust monthly giving programs as key to their fundraising success. Every nonprofit can benefit from a reliable revenue stream from recurring giving! In fact, some industry analysts think the consumer evolution towards subscription services indicates that monthly giving will be a pillar of every successful nonprofit.   

But most organizations can’t effectively collect and retain monthly donors. It’s widely accepted that nonprofits will only receive 70% to 85% of the recurring revenue donated. The rest is lost to credit card declines or the way the payment processing industry works. This can result in the loss of millions of dollars, depending on how many monthly donors your nonprofit has. 

CharityEngine’s Subscription Billing Technology: SustainerIQ

CharityEngine has been a market leader in subscription billing technology for more than 25 years. Back then, before the explosion of subscription services, its founders developed specialized cloud billing to power health and fitness giants (like Equinox) that needed to maximize collection of monthly dues.

Today, CharityEngine brings that same pedigree, technology, and expertise to power some of the largest monthly giving programs in the world. We help them maximize donation revenue collection and minimize passive churn using our subscription billing technology, called SustainerIQ. It’s a unique product built to help nonprofits collect and retain monthly donors and donations.

The results speak for themselves. Nonprofits using SustainerIQ consistently collect 10% –15% more revenue than the industry averages—this can add up to millions of dollars to your bottom line.

SustainerIQ is unique subscription billing technology that prevents passive churn better than any other payment processor.

This technology is made up of five key components.

1. Payment Processor Built for Recurring Donations

Unlike other nonprofit fundraising platforms and CRMs that rely on e-commerce tools designed for one-time transactions, our payment processing is built specifically for recurring payments and uses different rails.

E-commerce processing requires online authorization with an overnight payment gateway settlement. At every stop, fees are taken out. Many cards fail, often due to updated expiration dates, and there isn’t any recourse to recover that revenue.

Almost every cloud-based software uses e-commerce to process recurring donations. They submit each payment as a new transaction, which goes through all these steps.

Only CharityEngine offers specialized billing software that doesn’t use e-commerce. Our payment processing sends transactions right to the back-end mainframes of the world’s largest payment acquirers to instantly settle them.

We don’t use a payment gateway, and recurring payments aren’t declined when the expiration date passes. CharityEngine uses MID memory to “remember” a donor after the first transaction, and the system will accept future transactions from a trusted donor when an e-commerce system would reject the card. So your payments settle faster and are much more likely to be approved. Multiply the number of donors by the number of payments that will now clear, and you’ll quickly see the value of subscription billing technology.

2. The Most Effective Credit Card Updater

Many vendors offer credit card updaters, and CharityEngine is no exception. This feature automatically updates expired, lost, or stolen cards to prevent payment declines. But what makes our credit card updater, called CAU, the best?

CharityEngine’s CAU updates credit cards to ensure recurring donations don’t fail, and it updates most cards several times a month. This includes Visa, Mastercard, and Discover. American Express, however, has its own card updater, and payment processors must be certified to access it. CharityEngine is certified and our CAU updates American Express cards daily.

Most credit card updaters update cards from a consortium of participating banks. However, participation is voluntary, and banks can opt out. With other updaters, you don’t know that all cards are covered. CharityEngine updates more cards than any other provider.

Not all credit card updaters are the same, but our focus on collecting monthly donations means we invest in the most complete CAU ecosystem with every card brand to maximize the results.

We will add a caveat: card updaters alone are not enough to guarantee recurring revenue retention greater than 90%. The CAU is part of our billing technology but is one of many features that combine to produce spectacular results.

3. Strategic Resubmission Process

Another aspect of subscription billing technology is a strategic resubmission process. Our system uses real-time data to algorithmically heal and resubmit payments that failed previously during the same billing cycle.

CharityEngine uses trend data and decline codes to know when to resubmit payments and force them through; these are transactions that another payment processor would decline.

Subscription billing technology automatically resubmits cards that have been declined and recovers more of that revenue for your nonprofit.

4. Automated Reactivation System

CharityEngine offers advanced automation and workflows to help nonprofits save time and improve efficiency with highly personalized communications. This same technology is at work in our subscription billing technology.

We use real-time data to trigger personalized communication to donors whose payments are failing. If your donor has moved and not updated their address, for example, they would receive an email telling them their card can’t be processed because of the mismatched addresses. The email would contain a link to a secure and personalized reactivation experience that offers options, such as making up a missed payment or skipping a payment.

This has been proven to re-engage recurring donors and strengthen donor relationships. The technology helps nonprofits retain donors and strengthen their recurring revenue program…automatically.

Unlike our competitors, CharityEngine’s integration allows for this frictionless touchpoint in a personalized and secure way. Most importantly, it connects and updates the donor’s account in real time.

Our competitors have disconnected technology that can create duplicate monthly giving accounts in disconnected systems. If this happens, there is a real risk of double charging a monthly donor, sending them the wrong communication, and using expensive human processes to monitor and clean up data.

5. Batch Process Recurring Payments

Platforms such as CharityEngine use batch processing instead of point-of-sale (POS) to send recurring payments directly to the backend mainframes of the world’s largest payment acquiring banks to settle immediately.

Traditional online payments require repeated authorizations, expiration dates, and CVV codes, even for recurring donations. This means going through the same verification steps as a one-time transaction. However, when we process recurring payments, they go straight to settlement without these e-commerce barriers, as the trust is already established. Our system allows us to identify and heal payments that are good and resubmit them.

Nonprofits see higher conversion rates, instant settlements, and faster payment approvals with CharityEngine.

Subscription Billing Technology Helps Nonprofits Raise More Money

No other payment processor offers this complex and proprietary technology, and no other vendor can offer nonprofits the kind of results CharityEngine can.

If you have a monthly giving program, you can retain almost 100% of your revenue with CharityEngine. No other payment processor can guarantee more than 85% revenue retention….that’s just about a 15% revenue increase without running one fundraising campaign.

Only CharityEngine combines industry-leading technology, a robust platform with native tools, and a system specifically designed to collect more recurring revenue for nonprofits.

If you’re curious about how much more money your nonprofit can make just by switching to CharityEngine’s subscription billing technology, contact us. We will share what kind of a difference CharityEngine can have on your nonprofit, and how much more of an impact you will have on your mission.