Recurring payments & subscriptions

How automatic subscription billing works, what you need to set it up, and what to expect from Stripe's subscription tools.

Recurring payments — charges that happen automatically on a schedule — are the foundation of subscription businesses, membership sites, retainer agreements, and any service billed monthly or annually. This guide explains how subscription billing works and what is involved in setting it up.

Quick summary

Recurring billing means your customers are charged automatically at regular intervals — weekly, monthly, annually, or any schedule you set. You need a processor that supports subscriptions (Stripe is the most capable option). Once set up, charges happen in the background. You receive payouts on your regular schedule. Failed payments are retried automatically.

What "recurring payments" means

A recurring payment is a charge that repeats automatically on a schedule without the customer having to re-enter their card each time. The customer enters their details once, and their card is charged again at the next billing date.

Recurring payments are used for:

Monthly or annual memberships
Software or service subscriptions
Maintenance retainers
Installment plans for a one-time purchase
Automated invoice schedules

How subscription billing works

Customer subscribes. They enter their card details and agree to a recurring charge. Your site creates a subscription record in Stripe (or your processor).

First charge is processed. The initial payment is taken immediately (or at a specified future date).

Subsequent charges happen automatically. On each billing date, Stripe attempts to charge the stored card. If it succeeds, you receive a payout as normal.

Customer can cancel. Depending on your setup, customers can cancel themselves (through a customer portal) or by contacting you.

What you need to set up subscriptions

A Stripe account. Stripe has the most comprehensive subscription tools for web businesses. See Stripe basics for business owners and What we need to set up Stripe.

A clear subscription product. You need to define what the customer is subscribing to, the price, and the billing interval (monthly, annual, etc.).

Terms of service and cancellation policy. These must be clearly displayed before a customer subscribes. Requirements vary by country and state.

A plan for failed payments. Cards expire, get replaced, or have insufficient funds. You need a process for handling these situations.

What happens when a payment fails

When a recurring charge fails, Stripe does not give up immediately. Its recommended setting is Smart Retries, which uses AI to pick the times most likely to succeed rather than retrying on a fixed timetable. You set how many attempts to make and over what window — Stripe's suggested default is 8 tries within 2 weeks, and you can choose anything from 1 week to 2 months, or write your own retry schedule instead. The settings live under Billing → Revenue recovery → Retries in the Dashboard.

Once the retries are exhausted, you choose what happens to the subscription: cancel it, mark it as unpaid, or leave it as past due.

Stripe can also send customers automatic emails asking them to update their card details (called dunning emails — a billing term for collection reminders). These can reduce involuntary churn (customers who lose access because their card failed, not because they want to cancel).

Prorating and mid-cycle changes

If a customer upgrades or downgrades partway through a billing period, Stripe works out the pro-rated difference for you — crediting the unused time on the old price and charging for the remaining time on the new one. Worth knowing: by default those amounts land on the next invoice rather than being charged or refunded on the spot, though you can do either manually. You can also preview a proration before you apply the change.

The Stripe customer portal

Stripe offers a hosted customer portal — a webpage your customers can visit to:

Update their billing information
Update their payment method
Change their subscription
Cancel it, either straight away or at the end of the current billing period
Pay, view and download invoices

You can link to this portal from your website without building a custom account management page. You turn it on and configure it in the Stripe Dashboard, and we set this up as part of your subscription work. There are limits worth knowing about: a customer cannot change a subscription from the portal if it uses several products or usage-based billing, though they can still cancel it.

Subscriptions in WooCommerce

WooCommerce does not include subscriptions on its own. You need the WooCommerce Subscriptions extension, which is a paid add-on. It works with gateways that support automatic recurring charges, including Stripe and PayPal Payments. See Selling subscriptions (WooCommerce overview) for more.

Common questions

Can I offer a free trial?

Yes. You set the trial length when the subscription is created, and Stripe caps a trial at 730 days (two years). You can end a trial early, or add a trial to an existing subscription, by updating the subscription afterwards. The customer normally enters their card at signup but is not charged until the trial ends, and you can also run a trial without collecting a payment method at all, choosing whether the subscription then pauses or cancels. Stripe also supports discounted introductory periods, so a "trial" can be a reduced price for the first few weeks rather than free.

Can I charge different amounts on different months?

For truly variable billing, you would use Stripe's usage-based billing, where charges are calculated based on metered usage each period. This is more complex to set up but very flexible. Tell us if your business model requires variable billing.

What happens when a customer cancels?

Stripe can cancel immediately (no further charges) or at the end of the current billing period (the customer keeps access until the time they paid for runs out). You choose the cancellation behaviour when we configure your subscriptions. A cancellation scheduled for the end of the period can still be called off any time before that date. Once a subscription has actually cancelled, though, that is final: to bring the customer back you create a new subscription and collect their payment details again.

Can a subscription be paused instead of cancelled?

Yes. Stripe lets you pause payment collection on a subscription, from the Dashboard or the API, either indefinitely or until a date you set. The subscription stays active and the customer keeps access, but Stripe does not collect payment during the pause. This can save a customer who just needs a break rather than a cancellation.

Do I need to send receipts for each subscription charge?

Stripe creates a receipt for every successful payment, including recurring subscription charges, but emailing them is a setting rather than the default. Turn it on in the Dashboard under Settings → Business → Customer emails, where you toggle receipts for successful payments and for refunds. You can also brand the emails from your Dashboard settings.

Need a hand?

If you're stuck, email support@chykalophia.com and we'll help. Include your website address and a screenshot if you can.