How SaaS Platforms Can Offer Recurring Payments to Clients — and Monetise It

03 June 2025

Written by Libby James

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

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Turn Recurring Payments into a Competitive Advantage

For SaaS providers, adding recurring payments functionality is no longer a nice-to-have — it's a competitive advantage. If your software is used by businesses that charge their own customers, such as gyms, subscription services, online educators, or booking platforms, enabling recurring billing can significantly increase the value of your product.

Beyond improving your platform’s utility, it also unlocks new commercial revenue streams and deeper client retention.

This guide explains how SaaS platforms can offer recurring payments to their customers, the commercial models involved, and the technical and regulatory considerations you need to be aware of.

Why Offer Recurring Payments to Your SaaS Users?

Many SaaS products serve businesses that need to collect regular payments from their own customers. This includes industries such as:

Health and fitness (membership-based models)
eLearning platforms and coaching software
Subscription box services
Booking tools for salons, childcare, and events
Community and content platforms

Adding recurring payment functionality to your SaaS offering can:

1. Help Your Users Automate Their Billing

Manual invoicing, late payments, and payment reminders take up valuable time for your clients. Automating the billing cycle improves their cash flow and frees them to focus on customer service or growth.

2. Improve Retention by Embedding Your Platform Deeper

Once your users start processing payments through your platform, they’re more likely to stick with you. The deeper the integration into their daily operations, the harder it becomes to churn.

3. Expand the Use Case of Your Platform

Offering recurring billing allows your platform to support new types of businesses and monetisation models. This can help you acquire new customers in sectors that rely heavily on subscriptions and usage-based billing.

4. Create a New, Scalable Revenue Stream for Your SaaS Business

This is where the real commercial opportunity lies — and what we’ll cover next in detail.

Variable Recurring Payments (VRP): Flexible Billing

Variable Recurring Payments (VRP) are an emerging payment method enabled by open banking in the UK. Unlike traditional direct debits or card-based subscriptions, VRPs allow customers to give consent for businesses to collect payments of varying amounts, at agreed intervals, directly from their bank accounts. This makes them particularly useful for usage-based SaaS pricing models or services with fluctuating monthly fees. For SaaS platforms, integrating VRP offers greater billing flexibility, lower transaction costs, and improved cash flow reliability. While adoption is still growing, VRP is set to become a powerful alternative to traditional recurring payment methods—particularly for platforms looking to modernise billing and offer more transparent, real-time payment options to users.

Commercial Benefits: How SaaS Platforms Monetise Recurring Payments

Offering recurring billing capabilities to your users can turn your platform into a powerful financial layer — one that generates revenue from every transaction processed through it.

Revenue Stream 1: Transaction Margins

When you integrate a payment processor into your platform, you can apply a small margin on top of the base processing fee. For example, if the payment provider charges 0.7%, you can offer it at 1.0% and retain the 0.3% margin.

Example:

Monthly payment volume processed via your platform: £3,000,000
Applied margin: 0.3%
Monthly platform revenue: £9,000

Revenue Stream 2: Per-Transaction Platform Fees

You can also charge a small fixed fee per transaction — for instance, £0.10. This is especially effective for high-volume businesses.

Example:

Monthly transactions: 100,000
Platform fee: £0.10 per transaction
Monthly revenue: £10,000

Combined Commercial Impact

Total monthly recurring payment revenue: £19,000
Annual recurring revenue (ARR): £228,000

This income is entirely separate from your SaaS subscription fees and grows in proportion to your users’ transaction volumes.

Additional Commercial Opportunities

Interest on Held Funds

If you work with an authorised provider or white-label gateway, you may be able to share in the interest generated from held funds — particularly relevant in high-volume or delayed settlement models. The return is often linked to the Bank of England base rate and can create passive income for your SaaS company.

Value-Added Features

Recurring billing unlocks the opportunity to upsell users into advanced plans with features such as:

Branded invoices and receipts
Automated dunning (failed payment recovery)
Multi-currency and international support
Customer self-service portals
Revenue analytics and subscription reporting

These features increase average revenue per user (ARPU) and reduce churn by delivering essential tools businesses are willing to pay for.

Technical Options: How to Add Recurring Payments to Your SaaS Platform

There are three main ways to implement recurring billing for your clients:

1. Build Your Own Billing Infrastructure

This approach gives you complete control over user experience and pricing but comes with high development costs, complex compliance needs, and significant maintenance.

2. Embed a Payments API from a Provider

A faster route is to use a third-party payments provider that offers an API for billing and subscriptions. This lowers the barrier to entry, but you’re tied to their commercial terms and branding.

3. Use a White-Label Payment Gateway

A white-label solution allows you to brand the payments experience as your own while accessing full recurring billing features. It typically offers the best mix of control, customisation, and commercial benefit — including the ability to:

Set your own processing fees
Share interest earned on float (held funds)
Offer fully branded invoices and payment interfaces
Maintain full data ownership and visibility

White-label options are ideal for SaaS businesses that want to monetise the payments layer without becoming a full Payment Institution or taking on regulatory complexity themselves.

Key Features Your Clients Will Expect

When offering recurring payments, make sure your solution includes:

Support for multiple billing models: monthly, annual, usage-based, prepaid, and postpaid
Flexible pricing logic: discounts, bundles, tiered pricing, and promo codes
Multiple payment methods: card, direct debit, bank transfer, wallets
Failed payment handling: retries, alerts, and card updates
Tax compliance: VAT/GST calculation and invoicing
Customer self-service: the ability to pause, cancel, or upgrade subscriptions
Analytics: transaction data, churn metrics, and recurring revenue insights

The more sophisticated your offering, the more value your clients will get — and the more likely they are to process payments through your system.

Compliance and Operational Considerations

Offering recurring billing also introduces legal and operational responsibilities. Consider:

Data security: You must ensure that all payment data is stored and transmitted securely (PCI-DSS compliance).
Regulation: If you’re holding funds or controlling flows, you may need to be registered with the FCA or work under the licence of a regulated provider.
Settlement times: Be clear on how and when your users will receive funds.
Chargebacks and disputes: Decide whether your platform or your payment provider will handle resolution processes.

These risks can be mitigated through partnerships with experienced white-label or embedded payments providers.

How Merchant Advice Service Can Help

Merchant Advice Service supports SaaS companies across the UK and EU in building or scaling embedded billing and recurring payment capabilities.

We help you:

Identify the most commercially viable payment solution for your model
Compare white-label and embedded payment providers
Understand compliance and licensing obligations
Forecast your revenue potential from recurring payments
Negotiate fee structures and settlement terms

If you're a SaaS provider looking to turn payments into a revenue driver, we offer impartial advice and hands-on support.

Wrapping It Up

Offering recurring payments isn’t just a functional feature — it’s a strategic asset. By helping your users automate and scale their billing operations, you improve the stickiness of your platform and add real business value.

At the same time, controlling the payments layer enables your SaaS business to generate scalable, predictable income beyond subscription fees. Whether through transaction margins, platform fees, or interest share, recurring billing can become a core revenue stream in its own right.

The opportunity is real — especially for platforms serving fast-growing, subscription-driven industries. If you’re ready to explore recurring payments as a service and a revenue model, Merchant Advice Service is here to guide you.

FAQs

What are recurring payments in a SaaS platform?

Recurring payments refer to the automatic collection of payments at regular intervals (e.g. monthly or annually) for continued access to a product or service. For SaaS platforms, this feature can be offered to clients so they can manage and collect subscription payments from their own customers.

How can SaaS platforms monetise recurring payments?

SaaS platforms can generate revenue by applying transaction mark-ups, charging per-transaction platform fees, or earning interest on held funds. These fees are collected as their users process payments through the system, creating a new income stream for the platform provider.

What is a white-label payment gateway and why is it useful for SaaS?

A white-label payment gateway allows SaaS providers to offer branded payment services under their own name. This gives them more control over the user experience, enables pricing flexibility, and allows for commercial gains like fee mark-ups and revenue sharing, without needing to build or certify their own payment infrastructure.

Do I need FCA authorisation to offer payments through my SaaS platform?

Not always. If you’re facilitating payments but not handling or holding funds directly, you can usually operate under a licensed provider’s regulatory umbrella. However, if you intend to control funds or become a payment facilitator, you may need to obtain FCA authorisation. Professional advice is recommended.

Which recurring payment methods should my SaaS platform support?

The most commonly used recurring payment methods include credit and debit cards, direct debits (ACH/SEPA), digital wallets (like Apple Pay and Google Pay), and prepaid subscriptions. Supporting multiple methods improves flexibility and customer satisfaction.

Can recurring payments help retain SaaS customers?

Yes. By embedding payment processing into your platform, you increase switching costs and deepen the integration between your service and the user’s business. This makes your platform more valuable and improves long-term retention.

How long does it take to implement recurring billing in a SaaS product?

Embedding a third-party billing API can take a few weeks, while building a custom or white-label solution may take several months. Factors include development resources, legal compliance, and integration scope.

What should I look for in a recurring billing solution for my SaaS platform?

Key features include support for multiple billing models, automated failed payment handling, tax-compliant invoicing, flexible pricing logic (e.g. discounts and tiers), multi-currency support, and detailed reporting tools. The solution should also be secure, scalable, and easy to integrate