Blog / LearningThursday, July 9, 2020
A question I often receive is if Upodi is a PSP (Payment Service Provider).
The short answer is: no it is not.
So in the following, let me try to outline the difference between a PSP and a Subscription Management and Recurring Billing system, like Upodi.
First is the fundamental difference, the core business and the business model.
A PSP is the link between a customer (customer) and a business (merchant). To pay online for a product or service, you often use a debit card. To facilitate that transaction, you use a PSP that has created a payment flow that you can incorporate into your front end (web shop, app or similar). It is, in its basic essence, the core business.
A PSP gets its earnings by taking a small cut of each transaction. It ranges from 0.5% to more than 2%. That's in its basic essence what a PSP does. Handles credit card payments online. None mentioned - none forgotten. That's the business model.
A Subscription Management and Recurring Billing platform is included from cradle to grave on the customer journey.
Subscription management keeps track of your product plans, your customers, your subscriptions, customers' subscriptions to subscriptions, upgrades and downgrades, acquisitions, history and billing (and much more) - an area that is so broad that we will try to cover it more complete in an article separately.
In addition to these actions, there is also a larger amount of data that is analyzed and provides key figures on the customer journey.
So when different PSPs offer their smaller customers a solution that includes elements of subscription management then be aware that when it comes to supporting different payment preferences (credit card, payment service, FI card, iDeal, SEPA, Bank -to-bank, Klarna and others) it is one-size-fits-all and if you go to markets where online trading is not dominated by standard credit cards then you can experience [abandoned cart syndrome].
Make no mistake. There are fantastic systems from PSPs that can help you get started with a subscription business well and quickly. And not every company needs a 100% dedicated subscription platform like Upodi.
But that's what we are 100% focused on. And then we have a strong collaboration with a string of talented PSPs who help with the part of the customer journey that deals with credit card payments. It is their cutting edge competence and so we focus on what we are good at, namely everything that is beyond the card payment itself.
So no, Upodi is not a PSP and our business model is not based on a percentage of your revenue. We have an interest in helping you get so many subscribers / members into your business and that is the number we charge a fixed price. In round numbers approx. 1 kroner per subscriber. That's our business model.
... But we know someone who is really talented and has a strong working relationship with both QuickPay, Farpay, Paylike and other talented PSPs.
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