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title: "I need a subscription payments strategy | NjiaPay"
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description: "A step-by-step framework to build a subscription payments strategy focused on reducing involuntary churn and optimising the dunning process."
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21 Sept 2026
# **Optimising Your Subscription Payments Strategy: NjiaPay's Guide for South African Businesses**
In the subscription economy, involuntary churn (when a customer's payment fails and they are unable to renew their subscription) is a hidden threat to your revenue. For South African businesses, navigating local payment nuances, bank processing times, and customer communication is key to minimising this loss. This guide provides a comprehensive, step-by-step framework for NjiaPay clients to build a robust payments strategy focused on reducing involuntary churn and optimising the dunning process.
# **Step 1: Establish a Smart Billing Process**
There are a number of factors to consider as you establish your billing process.
To start, the type of subscriptions matters in the world of payments. The most common examples here are:
- Insurance / Gym: Billing date tends to be at the end or beginning of each month.
- Netflix / Spotify: Billing date is the date you signed up for their services.
Depending on which type of subscription your business falls within, you will need to consider how to structure your dunning and communication. If you bill your clients on the 1st of every month vs the 15th, the liquidity of your customers could vary, which will impact your dunning process (more on what the dunning process is in step 2).
Additionally, you need to consider the payment method your customer is using, because there is a difference between Debit Orders, Debit Cards, and Credit Cards, and also the time of day you submit the subscriptions.
### **Tailor Your Approach**
If the majority of your customers are using a Debit Card or Debit Orders,when you attempt to collect can affect whether the payment succeeds.
Where possible, schedule collections close to when customers are likely to receive their salary, when sufficient funds are more likely to be available in their bank account.
The time of day can also matter. Debit card payments submitted between 00:00 and 06:00 may see higher refusal rates, as some issuing banks may treat transactions processed during these hours as higher risk.
# **Step 2: The "Dunning" Process**
Dunning is the process of attempting to collect payment after an initial failure. But recovering a failed payment isn't simply a matter of trying the same transaction again.
Retrying too quickly, at the wrong time, or repeatedly attempting a payment that is unlikely to succeed can reduce the effectiveness of your Dunning process. Instead, you should account for the circumstances surrounding each failure. A smart retry logic is essential to recover most of your failed payments.
There are five important data points to consider:
1. **Refusal reasons:** Soft or Hard declines
2. **Payment method:** Cards vs Debit orders vs Open Banking
3. **Issuing Bank:** Absa vs Capitec vs Nedbank
4. **Date**: 1st vs 15th vs 25th
5. **Time**: Morning, Afternoon, or Evening
Together, these data points help you determine whether a payment should be retried, and when that retry is most likely to succeed.
### **Optimise Dunning**
We will focus on cards here for simplicity’s sake, to show how this works in practice.
**Start with the refusal reason.** Determine whether you're dealing with a ‘Soft’ decline, such as insufficient funds, a bank risk refusal or a technical outage, or a ‘Hard’ decline, such as an account being closed or a card being lost or stolen.
This distinction matters because a Soft decline may be recoverable through another attempt, while repeatedly retrying a Hard decline is unlikely to change the outcome.
**Next, consider the card type.** Credit and Debit cards shouldn't necessarily follow the same retry logic. Banks tend to apply stronger risk checks to Debit cards than Credit cards, which can affect how and when subsequent attempts should be made.
**Then look at the Issuing Bank.** Refusal patterns can differ between banks. For example, you may find that Absa Debit Cards produce a higher proportion of generic refusal reasons such as \[05: Do Not Honor] than FNB Credit Cards. Analysing these patterns allows you to build retry logic around how different Issuing Banks respond.
**Finally, consider when the payment failed.** The timing of your retries will significantly impact your success in recovering failed payments. As this can be correlated with customer behaviour such as paydays, when funds are available
#### As an example: Absa Debit Card, Refusal reason 05: Do not honor, tried on the 25th
**Another Example:** A subscriber's payment for R150 fails on a Monday at 10:00 AM due to "Insufficient Funds."
Rather than immediately attempting the same payment again:
- **1st Retry: Tuesday at 6:00 AM** <- Wait 20 hours to give a higher chance of success allowing time for funds to become available if the customer is paid on Monday evening, but still attempting early enough in the day for it not to be considered risky by banks.
- **2nd Retry: Thursday at 8:00 AM** <- Wait a few days to allow the subscriber to deposit funds
- **3rd Retry: The following week** <- Allow a further 3–5 days before the final attempt.
The appropriate schedule will depend on your own payment data, but the principle remains the same: use what you know about the failure to determine the next attempt.
## **Consider Transaction Specifics**
Your retry strategy should also account for how the transaction is processed.
In South Africa, the difference between a real-time clearing (RTC) transaction and a bulk electronic funds transfer (EFT) can affect the ideal retry time. Your Dunning process should therefore account for the payment rail rather than applying the same retry schedule to every failed transaction.
# **Step 3: Implement Proactive & Timely Customer Messaging**
Customer communication is an important part of the Dunning process. The objective is to give customers enough information and time to resolve a payment issue, without unnecessarily interrupting their access to your product or damaging your relationship.
Define a clear window in which customers can resolve failed payments while continuing to use your service (for example, seven days) and include this in your T&Cs.
Your communication should then reflect where the customer is in that window and what action, if any, they need to take.
## **Pre-Dunning Communication (Pre-emptive)**
For Annual subscriptions, notifying customers before a scheduled renewal can be useful. A year may have passed since the customer last made the payment, and their payment details or circumstances may have changed.
Send a reminder a few days before the renewal date, giving the customer an opportunity to check or update their payment method before collection.
- **Message:** "Friendly reminder! Your R500 NjiaPay subscription is due on Date. If your payment details have changed since your last payment, you can update them here: \[Link] to avoid service interruption."
For monthly subscriptions, however, pre-emptive communication may not always be necessary. If a customer is actively using your product and expects the recurring charge, a reminder before every payment may add little value. It could also prompt customers who weren't considering their subscription to cancel or pause it.
Consider the subscription frequency and customer behaviour before deciding whether this specific communication is appropriate.
##
**Post-Failure Communication (Immediate)**
After the 1st retry, notify the subscriber that the payment has failed, when you will attempt the payment again, and what they can do if their payment credentials need to be updated.
Make the required action as straightforward as possible:
- **Action:** Provide a clear, one-click link to update payment details.
- **Message:** "Oops! Your recent payment of R500 failed. Don't worry, we'll try again in 24 hours. To ensure uninterrupted service, please update your payment details now: \[Link]."
This message should go out after each retry, so the customer knows that the payment remains unresolved. Depending on your product and how customers typically interact with you, this could include communication through your App, email or WhatsApp.
As the end of the allotted payment window approaches, clearly communicate the date on which the service will be suspended if payment remains unsuccessful.
##
**Subscription Suspension Communication**
After the final retry, clearly communicate that the payment has not been recovered and what this means for the customer's subscription. If the service has been suspended or the subscription cancelled, tell the customer exactly what action they need to take to restore it.
- **Message:** "Action Required: We were unable to process your R500 payment after multiple attempts, and your subscription has now been suspended. Please update your details or make a payment now: \[Link to Update Payment] to resume your subscription."
# **Recovering Revenue Without Damaging Customer Relationships**
Not every failed subscription payment needs to result in repeated retries or immediate customer intervention.
Some failures can be resolved automatically. Others may require giving the customer another way to pay. The objective is to match the recovery approach to the reason for failure, giving you the best chance of recuperating the payment without creating unnecessary friction for the subscriber.
##
**Card Account Updater**
When a card payment fails due to Expired, Lost, or Stolen, trying the same card details won't lead to a successful payment collection.
Where supported by the Banks, solutions such as Card Account Updater (read more) can automatically retrieve updated card details, allowing you to continue processing the subscription without requiring the subscriber to manually update their information.
Card Account Updater can be used:
- **Proactively:** If a card expires in May, check in April whether updated card details are available before the next payment is due.
- **Reactively:** Following a refused payment, check whether updated card details are available before asking the subscriber to take action.
This can help recover payments that would otherwise require customer intervention.
## **Offer Alternative Payment Methods**
Sometimes the issue isn't the customer's willingness to pay, but the payment method being used.
Giving subscribers another way to settle the outstanding amount can provide a route to payment when the original method continues to fail. For South African consumers, this could include:
- Instant EFT
- Digital Wallets
- Vouchers
For example, following a failed card payment, you could give the subscriber the option to settle the outstanding amount using Instant EFT:
**Message:** “Having trouble with your card? You can also pay your outstanding R500 using Instant EFT to reactivate your subscription. Choose your preferred payment method here: \[Link to Payment Options].”
##
**Use Payment Data to Improve Your Recovery Strategy**
Your payment data can help you understand why subscription payments are failing and determine where changes to your Dunning process could have the greatest impact.
Use NjiaPay's analytics to identify patterns in your refusal reasons. For example:
- If **60% of failures are “Insufficient Funds,”** review when you bill customers and when subsequent retries take place. The opportunity may lie in better aligning your billing and Dunning process with when funds are available.
- If **30% are “Do Not Honor,”** the appropriate response may be different. A Bank refusal could be influenced by customer activity immediately preceding the subscription payment, requiring different retry logic for that subscriber.
Rather than applying the same recovery process to every failed payment, use your payment data to identify recurring patterns and build your Dunning strategy around **how** and **why** payments are failing.
# **The Impact of an Optimised Dunning Strategy (Case Studies)**
The strategic optimisation of billing and dunning is proven to deliver substantial returns.
A 2021 study on subscription billing success, published in a whitepaper by Recurly, highlighted the significant impact of intelligent retry logic."Data from subscription platforms shows that an optimised dunning process, which includes localised retry schedules and strategic communication, can recover between **5% and 15%** of otherwise lost monthly recurring revenue (MRR)."
For a South African company generating R1,000,000 in monthly recurring revenue, recovering just 5% would equate to an additional R50,000 per month, or R600,000 annually.
Another study, conducted by FlexPay, demonstrated that moving from a static, one-size-fits-all retry schedule to an adaptive, data-driven system (one that automatically adjusts timing based on local bank behaviour) **increased successful payment recovery by up to 20%** in certain markets. While this data is global, it underscores the need for NjiaPay clients to leverage data specific to the South African banking landscape.
The key takeaway is that recovery efforts should focus on why the payment failed and then use the appropriate retry timing and communication channel (email, SMS, in-app notification) to guide the customer to a solution. By following these steps, South African NjiaPay clients can significantly reduce involuntary churn, stabilise MRR, and foster a better, more trustworthy relationship with their subscriber base.
**Jonatan Allback**
CEO & Co-Founder · NjiaPay