Subscription Facts: 55 SaaS and B2B Payment Statistics for 2025

Failed SaaS subscription payments have emerged as a critical challenge for software companies, directly influencing cash flow, customer retention, and long-term business health. Payment failures and involuntary churn account for as much as 40% of lost subscribers and significant annual revenue leakage. Understanding why recurring payments fail, and tracking their impact, is essential for any B2B SaaS business aiming for sustainable success.

What Are the Typical Payment Failure Rates for SaaS and B2B?

Payment failures are a recurring challenge across SaaS and B2B businesses, driving substantial involuntary churn and revenue losses.

  1. Average transaction failure rate across industries: 7.9%
  2. Payment failure rates can reach up to 14.7% in certain sectors
  3. Failed payments are now the top concern of 40% of subscription businesses
  4. For every $1 in actual fraudulent online payments, $25 of genuine online payments are falsely declined.
  5. 62% of users who encounter a payment error never return to the merchant’s site, making false declines a major long-term revenue risk.
  6. Merchants could lose up to 75 times more revenue to false declines than to actual fraud.
  7. Churn from “card declined by processor” is responsible for 2–5% of all lost sales

How Significant Is Involuntary Churn in Subscription and SaaS Businesses?

Involuntary churn—customers lost to failed payments—is a major source of lost revenue and has profound effects on long-term growth.

  1. Average B2B SaaS involuntary churn rate: 0.8% (out of 3.5% total churn)
  2. Healthy SaaS businesses maintain involuntary churn rates below 1–2% monthly
  3. Involuntary churn can represent up to 40% of total churn for subscription businesses, with some high-risk sectors reporting rates as high as 48%.
  4. 50% of churn in subscription retail results from declined card payments
  5. 27% of subscribers cancel immediately after a payment failure due to frustration
  6. Subscription-focused businesses can lose 10–20% of annual recurring revenue to involuntary churn
  7. Average involuntary churn rate: 1% (compared to 3% voluntary churn)
  8. SaaS businesses typically see 1–4% of customers lost monthly to involuntary churn

What Are the Main Causes of Payment Failures?

Payment failures arise from a variety of sources, ranging from insufficient funds and expired cards to technical processing errors.

  1. Insufficient funds account for approximately 26% of payment failures
  2. Insufficient funds make up over 30% of failed subscription payments
  3. The “generic decline” label accounts for around 39% of all failed subscription payments
  4. Expired cards are a major driver of revenue churn for subscription businesses
  5. Visa cards in payment vaults average ~21 month lifespan, MasterCard ~14 months
  6. American Express and Discover cards average ~34–35 month lifespan
  7. Visa and MasterCard expiration peaks occur in March and October

How Big Is the Impact of Revenue Leakage and Billing Errors?

Revenue leakage from failed payments and billing mistakes can add up quickly, eroding margins and hurting enterprise and growth-stage businesses.

  1. SaaS companies lose an average of 4–10% to revenue leakage annually
  2. 26% of global annual revenue is lost to revenue leakage according to RevOps leaders
  3. 42% of companies actively experience revenue leakage issues
  4. Enterprise companies (1,000+ employees) lose an average of 20% of revenue to leakage
  5. For a $10M ARR SaaS company, 7.9% failure rate equals $790,000 in at-risk revenue
  6. At a 60% recovery rate, a $10M ARR company still loses $316,000 annually
  7. 22.2% of fast-growing SaaS companies lose over 10% of ARR to late payments and defaults
  8. Billing errors lead to 61% of late payments
  9. 12.5% of manual invoices contain errors
  10. Invoice errors can cause 15–20% client churn in subscription businesses

How Effective Are Payment Recovery and Dunning Management Strategies?

Smart retry strategies and effective dunning processes are essential for recovering lost revenue and keeping SaaS cash flow healthy.

  1. Top-performing SaaS companies achieve 80%+ payment recovery rates
  2. Leading SaaS companies achieve 85%+ recovery rates through sophisticated dunning
  3. Well-executed payment recovery strategies recover 15–30% of failed payment revenue
  4. Optimized retry strategy can recover 45–70% of initially failed payments
  5. Best-in-class SaaS businesses achieve payment recovery rates of 70–85%
  6. Companies with optimized dunning recover 70–85% of at-risk revenue
  7. Automated dunning systems help recover 40–60% of lost payments
  8. Dynamic retries recover 7.8% more purchases (a 36% relative improvement) vs. static retries

How Do Payment Failures and Churn Affect Customer Lifetime Value?

Missed payments and churn events have major implications for lifetime value, acquisition cost, and customer support overhead.

  1. Average subscription customer stays for 24 months
  2. A $50 monthly subscription represents $1,200 in expected lifetime value
  3. Involuntary churn can represent up to 30% of total customer churn
  4. SaaS Customer Acquisition Cost (CAC) averages $205 and is rising
  5. Customer service reps spend an average of 15–20 minutes handling each payment failure inquiry

What Do Healthy Accounts Receivable Practices Look Like?

Maintaining tight aging buckets, minimizing overdue invoices, and streamlining billing processes help sustain profitability and reduce churn.

  1. SaaS companies should keep 60–70% of AR in the 0–30 day bucket for healthy cash flow
  2. Customers with 60+ day overdue invoices show a 35–50% annual churn rate
  3. Staff spend 3–7 days identifying and correcting billing errors
  4. 11% of payment delays are caused by the client not receiving the invoice on time
  5. Effective dunning systems generate 10–15x return on investment

What Are the Benchmarks for SaaS Renewal and Retention Rates?

Churn and renewal rates act as key indicators for SaaS business health and reveal areas for operational improvement.

  1. Average B2B SaaS churn rate: 3.5% (2.6% voluntary + 0.8% involuntary)
  2. Overall churn rate hovers near 10% for subscription apps
  3. Median first renewal rate for subscription apps: 58% (varies by category)
  4. Good renewal rates for B2B SaaS: 80–90%; below 50% signals major problems
  5. Annual subscription first renewal rates dropped 13% (from 40.4% in 2022 to 35.3% in 2023)

The Kaplan Group has a long history of helping B2B SaaS companies recover revenue lost to failed payments, involuntary churn, and payment disputes. Our unique debt collection process results in an 85% success rate. Whether dealing with auto-renewal compliance issues, payment plan enforcement, or disputed invoices, our team brings deep expertise in SaaS-specific collection challenges

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