How to Set Up Subscription Payments [Step by Step Guide]

You’ve read the numbers, right? Like, 1 in 3 young people already pay for a subscription, and subscribers spend up to 250% more than one-time buyers, especially in software. 

No surprise you want to learn how to set up a subscription payment system. And that’s a smart move, because chasing one-off payments is exhausting. 

With that in mind, we’ll show you the subscription payment setup process across PayPal, Stripe, Shopify, and Agency Handy.

Key Takeaways

• Start by defining your offer, choosing billing cycles, and setting up a product or service in your payment platform.
• Always run a test flow to avoid failed checkouts later, comply with PCI, GDPR, and taxes to protect your business from penalties.
• Agency Handy makes subscription billing simple with automated invoices, multiple payment options, tax setup, and auto payment reminders.

How to Set Up Subscription Payments

Getting recurring payments running sounds complex, but it’s not. With the right setup, you can set it up and run within a few minutes.

• Define the Offer: Decide what you’ll bill on a recurring basis, whether software access, monthly services, or physical products. 
• Choose Billing Frequency: Set whether charges happen weekly, monthly, or yearly. Some businesses also offer flexible cycles like every two weeks.
• Select a Payment Platform: Here’s the catch: you can’t usually run subscription payments without a payment gateway. Tools like Stripe, PayPal, or subscription management platforms like Agency Handy handle recurring charges, security compliance, etc.
• Configure Subscription Plans: Create one or more tiers. You might start simple with a flat rate, then later add advanced options like usage-based pricing or annual discounts.
• Enable Dunning Management: Set up automatic retries for failed payments and reminders for late payments or expiring cards. 
• Add taxes and Compliance: Handle VAT, GST, or sales tax where required. Good payment systems help with PCI, GDPR, and SCA compliance too.
• Test the Flow: Before going live, run a test subscription. Ensure customers can sign up easily, payments process correctly, and invoices reflect the right details.

How to Set Up Subscription Payments Using Agency Handy

With Agency Handy, subscription setup is effortless and reliable. Here’s how you can set up automatic bill pay service for small businesses in just a few steps —

Step 1: Create a New Service

Sign up on Agency Handy and head to Service from the sidebar. 

Then, select Create Service.

This is where you set the stage —

• Give your service a name clients will instantly recognize.
• Upload a cover image (PNG, JPG, or JPEG up to 5MB) to make it stand out.
• Write a description that sells the value clearly.

Now comes the critical decision: choose subscription instead of one-time pricing and select the currency you want to get paid in. This single choice flips your service from occasional income to steady revenue.

Step 2: Configure Packages and Payment Cycles

Next, design your packages by adding the Package name and a brief. 

After that, you need to —

• See how you want to charge daily, weekly, monthly, or yearly.
• Add a price for your service
• Decide on fixed billing cycles (e.g., 3 times only) or keep it continuous until the client cancels.

This is where you create flexibility for clients while ensuring predictability for yourself.

Step 3: Add Advanced Settings That Do the Heavy Lifting

Agency Handy doesn’t stop at “basic.” You can add —

• Default tasks to simplify delivery.
• Portfolio projects to showcase past work.
• Taxes for compliance without extra tools.

Plus, Agency Handy’s smart subscription reminder system is convenient as it covers every scenario —

• Upcoming Renewal Reminder
  
• Payment Due Today
  
• Missed Payment Notice
  
• Failed Renewal Alert
  
• Final Reminder

You set the timing, Agency Handy does the nudging. 

Step 4: Add FAQs for Clarity

Clients appreciate transparency. Use the built-in FAQ section to answer common questions before they even ask. 

It builds trust and cuts down on endless back-and-forth emails.

Step 5: Intake Form and Sharing Options

Finish by adding an intake form, either use a pre-built template or create your own.

It helps you capture everything you need upfront to get started smoothly.

Click Skip or Update, and you’ll instantly have a shareable URL. 

Send it directly to clients or embed it on your website to make your service look as polished as any top-tier agency offering.

How to Set Up Subscription Payments on PayPal

PayPal makes it simple to start collecting recurring payments. Here’s how to do an automatic PayPal payment step by step —

1. Create or Upgrade to a PayPal Business Account

Subscription tools are only available on PayPal Business. So, if you’re still on a personal account, head to Account Settings and upgrade. Once active, you’ll see Business Tools in your dashboard.

2. Access Subscription Options

In your PayPal menu, go to —

• Pay & Get Paid 
• Tap Subscriptions
• Click Get Started

This is where you’ll enter details like subscription name, billing cycle (daily, weekly, monthly), and price.

3. Add Product Details

Define the subscription product —

• Name and description (e.g., “Loyalty Membership”)
• Product ID (5–50 characters, no spaces)
• Type (service, digital good, or physical item)
• Category (like entertainment, software, or services)
• Product page URL (the page where customers see the offer)
• Product image URL (visual to match your plan)

4. Build a Subscription Plan

Next, set up the actual plan. Choose between —

• Fixed pricing (same charge each cycle)
• Quantity-based pricing (amount changes with usage or units)

Then add —

• Plan name (e.g., “Basic Plan”)
• Plan description (short note on who it’s for)
• Price and frequency ($4/month, $10/week, etc.)
• Trial period or setup fee (optional)
• Billing cycles (limited or ongoing until canceled)
  

5. Review and Activate

Check all details carefully. You can save as draft if you need edits later or activate the plan right away. Once live, PayPal tracks active subscriptions, paid/unpaid accounts, and plan performance in your dashboard.

6. Monitor and Manage Subscribers

After launch, you’ll see subscriber numbers, payment statuses, and trends. In fact, customers are billed automatically, and you can manage refunds or cancellations directly inside PayPal.

How to Set Up Subscription Payments on Stripe

Stripe makes subscription billing simple once you know the steps. Here’s how to do it right.

1. Log in and Open Subscriptions

Head into your Stripe Dashboard. Under Billing, you’ll find the option to manage subscriptions. For one-off charges, invoices are fine, but here you’ll want Create Subscription in the top right.

2. Add or Select a Customer

Every plan needs a customer. You can pull up someone already in your account or add a new one with their name and email. Stripe will save their details for ongoing charges.

3. Create a Product

Now define what you’re selling. Add a product name (like “Monthly Coaching via Zoom”) and a quick description. You can also upload an image if you want. 

Once created, the product can be reused for future clients.

4. Set the Pricing Plan

Pick recurring billing and enter your rate. Stripe lets you charge daily, weekly, monthly, quarterly, or yearly. 

Example: $99 billed every month. Choose your currency if you’re working with global clients. You can also add extras like a setup fee, trial period, or custom cycle length.

5. Advanced Pricing Options

Stripe gives you more flexibility if you need it —

• Tiered pricing to adjust rates based on volume or usage
• Per-seat pricing to charge per user, ideal for SaaS
• Package pricing to sell groups of units at one rate
• Usage-based billing to charge based on actual consumption

6. Confirm Payment Method

You’ve got two ways to collect money —

• Auto-charge the card or account on file
• Email an invoice link so the customer enters payment details securely

A common flow is to send the invoice first, get the card on file, then switch to autopay for future cycles.

7. Review and Launch

Check the plan name, billing amount, and customer details. Then, add an invoice memo or footer if you want. 

When everything looks good, hit Create Subscription. Stripe will send your customer a secure email to confirm and pay.

8. Manage and Track

Once live, you’ll see subscriptions update in your dashboard. You can track active customers, paid and unpaid invoices, and make plan changes. 

Stripe also takes care of retries for failed payments, proration when customers switch plans, and automated reminders.

How to Set Up Subscription Payments on Shopify

Setting up recurring payments might seem tricky at first, but with the right steps, you’ll be up and running in no time. Let’s break it down.

1. Add Your Subscription Product to Shopify

Start by adding your subscription product to your store. 

• Go to the Products section in Shopify
• Create a new product listing,
• Label it as a subscription option 

You’ll need this to connect it with your subscription app later.

2. Choose a Subscription App

Shopify doesn’t handle recurring payments on its own. You’ll need a third-party app like Loop Subscriptions or Recharge to make it easy. Once you’ve picked your app, complete its setup journey by providing details about your subscription plans.

3. Integrate a Payment Gateway

To process payments for your subscriptions, you need a payment gateway. Shopify supports —

• Stripe
• PayPal Express
• Authorize.net
• Shopify Payments for recurring transactions 

Choose the one that works best for you and integrate it into your Shopify store.

4. Configure Subscription Details in the App

Once your app is set up, it’s time to configure the subscription options. Define billing cycles (monthly, yearly, etc.), apply any discounts, and set your preferred payment intervals. 

Make sure your app syncs the products with these details.

5. Add a Subscription Widget to Your Store

A widget makes the subscription offer visible and easy to purchase. It’s a simple yet crucial step. Install the widget on your Shopify product pages to allow customers to see the subscription option and subscribe easily.

6. Monitor and Adjust Settings

After the initial setup, monitor the performance of your subscription model. You might need to adjust pricing, billing intervals, or offer additional discounts based on customer feedback and business growth.

Pricing and Plan Structure Best Practices for Subscription Payments

PwC research shows that convenience (51%), affordability (47%), and routine (42%) are the top reasons people stick with subscriptions. That’s your benchmark when building plans.

So, let’s explore the best ways to structure your pricing —

1. Flat Rate vs. Tiered vs. Usage-Based Pricing

Choosing the right model is all about understanding your business and your audience.

• Flat Rate: One price for everyone, no matter what. It’s easy to understand, but it doesn’t always match your customers’ needs. It works well when the value you offer is pretty much the same for all your clients.
• Tiered Pricing: You offer different price points based on the features or the level of service. This allows you to cater to different customer groups and capture more value from clients who need more.
• Usage-Based: This one is all about how much your customers actually use. It’s a good choice for things like software or services that change depending on how often someone uses them. Plus, it can keep customers more mindful of their usage.

2. Free Trial vs. Freemium vs. Paid-Only

You need to be careful when offering free trial, freemium, and paid models

• Free Trial: Give customers a taste of what you offer, but set a limit. Too short, and they may not experience enough; too long, and they may lose interest before they have to pay. Find the sweet spot to drive conversions.
• Freemium: Offer basic features for free, but charge for the advanced ones. This model works best when your customers can see the value of upgrading as they use your product more.
• Paid-Only: No free options, just paid plans. This forces customers to commit fully. While it might limit your audience, those who sign up are likely more engaged and invested in your service.

Choose wisely, and the right model will encourage long-term growth.

3. Discounts for Annual Subscriptions

Offering a discount for annual plans can be a game-changer. It encourages your customers to commit to the long run, which not only helps your cash flow but also reduces churn. 

A discount of 10 to 20% for those who pay annually can also increase conversion rates.

4. Psychological Pricing and Its Effect on Churn

Here’s where small changes can make a big difference. Ever wonder why some prices end in .99? That’s psychological pricing at work. 

It’s the little things, like pricing a plan at $9.99 instead of $10 can make customers feel like they’re getting a better deal, even if the difference is just a cent. This trick can lower churn by making your pricing feel more appealing. 

People are more likely to stay subscribed when they believe they’re getting a great value. 

Compliance, Security, and Taxes Regarding Recurring Payments

If you’re running subscriptions across regions, you’ve got to cover security, taxes, and fraud from day one. Let’s keep it simple.

PCI DSS, GDPR, and SCA Regulations

You can’t afford loose ends when it comes to payments. See, 

• PCI DSS locks down card data. 
• GDPR keeps customer information safe in Europe. 
• SCA adds another layer of verification for EU payments. 

So, pick a platform that already handles these for you.

Tax Handling 

Taxes are where many subscription businesses trip up. The EU wants VAT, the US wants sales tax by state, and once you go international, each country adds its own rules. 

So, the smartest move is using a system that calculates rates, issues compliant invoices, and updates tax changes automatically. That way you don’t end up undercharging, overpaying, or scrambling to fix penalties later.

Fraud Prevention and Chargeback Protection

Recurring billing is a magnet for fraud. Fake sign-ups, stolen cards, and chargebacks can eat into your margins fast. Thus, you need fraud filters, velocity checks, and real-time alerts running in the background. 

With chargeback protection, you won’t lose money every time a dispute comes up. Tools like Stripe Radar or PayPal Seller Protection take most of that weight off your shoulders.

Common Mistakes to Avoid When Setting Up Subscription Payments

Here are the most common pitfalls and how to avoid them when starting a subscription payment system.

Picking the Wrong Payment Processor

Not all processors are built for subscriptions. Some lack recurring billing automation, multi-currency support, or dunning tools. Choosing the wrong one means more manual work and frustrated customers. 

Always compare options like Stripe, PayPal, or Agency Handy for fees, integrations, and flexibility before committing.

Not Testing Before Launch

Without trial runs, you risk failed payments, broken checkout flows, or customers not receiving invoices. In that case, run sandbox tests, process dummy payments, and check both client and admin dashboards. 

Hiding Fees or Making Cancellations Difficult

Adding hidden charges or making it hard to cancel creates resentment and churn. Thus, show full costs upfront, explain processing fees clearly, and allow easy plan changes. 

Honest, simple cancellation flows reduce frustration and can even retain customers.

Ignoring Compliance

As mentioned earlier, PCI, GDPR, and SCA rules aren’t optional. Ignoring them risks penalties and lost credibility. 

A compliant processor handles most of this for you. However, you must still ensure that customer data, payment details, and refund policies meet regional laws. 

Final Words

You should know how to set up subscription payments to create steady income and keep client trust. You’ll need to lock in billing cycles, manage taxes, and stay compliant. Stripe, PayPal, and Shopify cover the basics. 

But the real test is making the whole flow smooth for you and painless for your clients. 

That’s where Agency Handy stands out. We built it with agencies in mind, including automated invoices, reminders, tax configuration, and multi-currency billing. Plus, you can accept Stripe, PayPal, Wise, and even crypto. 

FAQs

Can I accept recurring payments without Stripe?

Yes, most of the platforms allow you to accept recurring payments without Stripe. Agency Handy supports PayPal, Wise, manual banking, and even cryptocurrencies like Bitcoin or Ethereum. This flexibility ensures you have multiple payment options to suit your business needs.

How do I track subscription revenue in Agency Handy?

Agency Handy tracks subscription revenue easily through its intuitive dashboard. Once a client subscribes, their payments are displayed in real-time, and you can manually update payment statuses if needed.

Can I set both one-time and subscription pricing?

Yes, you can set both one-time and subscription pricing in Agency Handy. Simply choose between one-time or recurring billing for each service, depending on your business model. This flexibility allows you to serve various client needs while maintaining simplified payment workflows.