Software as a service (SaaS) is one of the easiest business types to expand abroad. In fact, the average public SaaS business sees up to 30% of its revenue come from outside North America.
With no physical product to ship in most cases, one of the biggest logistical headaches of doing business overseas just…disappears.
But of course, international shipping isn’t the only thing SaaS and other subscription billing businesses need to worry about when looking to scale abroad. These businesses also need to have a good handle on how they’re going to manage recurring billing, payments, taxation, and more in their new global markets.
The complications of international expansion
Even when you don’t need to worry about getting a physical product from point A to point B, there are still a lot of considerations that come with doing business in other countries—some of which have a huge impact on the way in which customers perceive your brand while others can have serious legal consequences if handled incorrectly.
- Selling in different currencies: You’ve probably experienced this while shopping online—you found a product you think you’ll love, but once you hit the checkout page, you realize the site is going to charge you in a different currency from your own. Maybe it doesn’t stop you from making the purchase, but it probably makes you think twice…after all, the product just got a bit more expensive thanks to the conversion fees you now need to cover.
- Accepting recurring payments: The payment industries in different countries have different methods of communicating with banks to allow merchants to accept payments. For example, in the U.S., ACH is the backbone of the payment industry, while in Canada, online payments are made through EFT. Both methods achieve the same result—sending money from one entity to another—but the way in which it’s achieved is different, and it’s not translatable. Canadian customers can’t make ACH payments, and vice versa.
- Handling foreign taxation: Taxes on customers’ recurring invoices can be a logistical nightmare when you’re doing business in different jurisdictions. You’ll run into different rates, tax types, and ways of calculating taxes—i.e., in Europe, taxes are incorporated into the base price of a product, while in North America they’re added at checkout.
- Bureaucratic red tape: Then, of course, there’s the legal stuff. Business entities, tax remittance…this is the stuff that can be downright scary to get wrong.
It’s a lot to stay on top of. So what happens when businesses try to handle this alone?
What they inevitably run into is a lot of complexity that they’re not really well-prepared to deal with,” says Mike French, VP of Partnerships and Alliances at Digital River.
The team at Digital River are experts in enabling businesses to scale abroad—they’ve been removing the risk and complexity of global commerce for businesses for nearly 30 years.
So how can your subscription billing business side-step these complications and succeed on the international stage?
The right recurring billing software integration simplifies global transactions
The human, financial, and legal resources required to internationalize can create barriers and bottlenecks for small to medium-sized businesses.
Stax Bill recently partnered with Digital River to launch a software integration that lowers those barriers and makes the process of scaling recurring billing operations internationally much simpler.
“What matters from our perspective for brands is that they focus on what only they can do. That’s making great products,” continued French. “And what we’re working to do with Stax Bill is provide the background, the capability set that makes it possible for a brand to do all of that.”
While an automated recurring billing software solution itself optimizes end-to-end SaaS billing operations at scale, the right international-growth-focused eCommerce solution helps take the process global.
1. Lowered financial risk with merchant of record services.
Digital River acts as the merchant of record for your international transactions. This means your business doesn’t have to worry about setting up subsidiary companies in each country where you do business or hire lawyers to make sure you’re staying compliant.
Instead, Digital River takes care of:
- accepting and reconciling payments
- managing requests for refunds and chargebacks
- converting currencies, and
- ensuring compliance with security standards, data protection regulations, and any country-specific laws or regulations.
Essentially, your business can pass on all liability associated with scaling globally and doesn’t need to worry about maintaining banking relationships, payment gateways, or merchant accounts.
2. Improved customer experience with an international payment gateway.
When you’re working with international customers, you could charge them in your currency. It certainly makes things much simpler on your end—no need to worry about conversion and no need to switch to a new payment gateway just for the sake of processing other currencies.
But just because you can doesn’t mean you should.
Up to 50% of customers will choose not to do business with a company that charges in a foreign currency.
“When you start doing business in a new geographic market, the biggest thing you want to do is provide your customers with as localized an experience as you can,” advises French.
Digital River’s payment gateway enables you to process payments securely in different currencies, helping your SaaS business provide a better experience to customers in other geographic markets.
3. Automated recurring billing to smooth out internal processes.
And of course, Stax Bill’s recurring billing system streamlines the subscription management and recurring revenue side of your business at home and abroad.
Automating and enhancing recurring billing processes is a powerful digital transformation step for SaaS and subscription-based businesses looking to scale. Catalog inflexibility, inefficient processes, and human errors can cause your business to lose money and agility—exactly the opposite of what you want when expanding globally.
With automated recurring billing software, businesses can do things like:
- reduce their time spent billing by up to 80%
- reduce late and failed payments by up to 700%
- create a single source of truth (SSOT) for their accounts receivable data
- dig into subscription and revenue reports to improve customer experience and retention
- customize plans, products, and pricing down to the customer level, and
- take advantage of reports and features designed to minimize aging accounts receivables, such as automated dunning emails, payment method retries, and credit card auto-updating.
By integrating your recurring billing software with an international-growth-focused ecommerce solution, you enable your business to scale its end-to-end billing operations while dramatically reducing the risks and complications of global expansion.
Global ecommerce + recurring billing software: better together for going global
Running the recurring billing side of a subscription business is hard. Handling foreign taxes, compliance, and payments is hard. Doing it all together without the right integrated technology stack might feel impossible.
With Digital River taking on the liabilities and mitigating the headaches of foreign expansion, the barrier for international growth is greatly lowered. And with Stax Bill automating your business’s recurring invoices and subscription management activities, it’s almost like your financial operations are running themselves.
So, with the right software integrations, taking your business international is suddenly much less of a hassle, no matter where your business is along its scaling journey.