Get started with subscription management

When setting up a subscription, you decide how you want to collect payment automatically from your customers. You have three main methods to choose from:

• Collect payment via digital invoice (first-time setup): Share a digital invoice link with your customer. Once they pay this first invoice, their payment method is securely saved, and all future subscription payments will be automatically charged using that collected method.
  • Requirements: You must choose an account that has Airwallex Payments activated to use this option. Customers can pay using credit cards and other supported methods.
• Automatically charge (saved method): If the customer already has a payment method saved on file, you can choose to charge it automatically every time an invoice is generated by the subscription.
  • A quick tip: If the first invoice includes any IN_ADVANCE fees, we charge that invoice immediately. All future payments and invoices will then follow the standard due date you set in your subscription configuration.
• Collect payment out-of-band (manual): If you're managing payments outside of Airwallex Billing (e.g., through a direct bank arrangement), choose this option. You will then need to manually mark the invoice as paid in the system once you've confirmed receipt of the funds.

Dunning

Airwallex automatically manages failed payments to help you recover revenue and keep customer subscriptions active. This process is called Dunning.

• Status change and retries: When an automatic payment attempt fails, the subscription status immediately changes to UNPAID. Airwallex will then automatically retry the payment up to four times on a strategic schedule: after 1 day, 2 days, 5 days, and 7 days.
• Payment success: If any payment retry succeeds, the subscription status instantly moves back to ACTIVE, and the billing continues as normal.
• Final failure action: If all retries fail, Airwallex takes a final action based on your Billing settings:
  • The subscription can be set to remain as UNPAID (allowing your team to follow up manually).
  • The subscription can be set to move to CANCELLED status (stopping all future billing attempts).

When you have a subscription with a mix of different billing models, Airwallex makes sure you bill everything efficiently on the same day. This avoids sending your customer multiple invoices or charges throughout the month.

• In advance fees (like a flat monthly access charge) are always billed on the first day of the cycle.
• In arrears fees (like usage-based fees from the previous cycle) are billed on the day after the cycle ends (T+1).

This alignment means the charge for the current cycle's flat rate and the charge for the previous cycle's usage will always hit the customer's account on the exact same date and can be combined in to the same invoice.

Example: Monthly subscription

Imagine a monthly subscription that starts on January 1st.

Both fees are conveniently combined into the same invoice generated on the first of the month.

Subscriptions have multiple states. A subscription with a free trial moves from IN_TRIAL status to ACTIVE status when the trial period ends. If a subscription is created with a future start time, it will be in PENDING status until the trial period or paid billing period starts.

See Billing event types for webhooks emitted for subscriptions.

1. Go to the subscriptions app, and click New subscription.
2. Fill in the basic information for the subscription. You can either select an existing customer or create a new customer from within the create subscription flow.
   • Note: You can set default values for the billing entity and the billing currency in your billing settings and customer settings.
3. Fill in the subscription information for the subscription.
   • Line items: When adding line items for a subscription, you must choose the product, price and the quantity per line item.
     • You can add multiple line items with different billing types and frequencies in a single subscription. This is great for hybrid billing models where you may charge, for example, an up-front annual fee, and monthly usage based fees in arrears.
     • Any new line item frequencies to be added must be compatible with existing line items. This means the billing date for the line items must fall on a consistent billing cycle (e.g., every x months)
   • Tax rate: You can choose a custom tax rate to apply to your subscription line items.
   • Free trials: You can add free trials to your subscription.
     • Free trials are exclusive of the billing duration, meaning the total subscription duration will be the Free Trial Duration + the Billing Duration.
4. Configure payment settings for your subscription.
   • You can choose to automatically charge if you have an existing payment method on file.
   • If you’d like to collect a new payment method, you can choose to collect payments via digital invoice. When the customer pays the first time, the payment method will be saved and used automatically for future payments.
5. Add any additional information you require for your subscription, and then click Create subscription.
6. Your new subscription will be created, and you can now view it in the subscriptions app.
   • From the subscriptions list you can view the subscriptions details by clicking on it in the table.
   • From the subscriptions details drawer, you’ll also be able to manage this subscription, and view related invoices.

The information that can be edited will be dependent on the current status of the subscription. You cannot edit customer, billing entity, billing currency, line items, or tax rate for a subscription.

1. From the subscription drawer, open the Manage dropdown and select Edit subscription to update your subscription information.
   • PENDING subscriptions can edit start date
   • PENDING and IN_TRIAL subscriptions can edit trial duration
   • PENDING, IN_TRIAL, and ACTIVE subscriptions can edit billing duration, due date, payment setting, memo, and metadata.
2. Update your subscription information and click Save changes.
   • Any changes you make to your subscriptions details will be used for all future invoices for this subscription. Any previously created invoices will not be impacted by the changes.

Duplicating a subscription will help you to create a new subscription using the original subscriptions information so you can create similar subscriptions easily.

1. From the subscription drawer, click the Manage dropdown and click Duplicate subscription to duplicate your subscription.
2. Update your subscription information accordingly, and click Duplicate subscription. Any changes you make to the original subscription will not impact the new subscription.

Cancelling a subscription is a permanent action, and once cancelled a subscription cannot be reactivated. Any pending automatic payments will be stopped for the subscription.

When cancelling a subscription we provide multiple options to handle paid and unpaid fees for the current billing cycle of the subscription. These options include pro-ration options up to that date of cancellation.

1. From the subscription drawer, click the Manage dropdown and click Cancel subscription to cancel your subscription.
2. Choose the cancellation date to cancel the subscription. You can choose how you would like to handle both unpaid, and paid fees for any line items that may require pro-ration.
3. Click the Cancel subscription button to cancel the subscription.

How pro-ration works

When a subscription is cancelled mid-cycle, pro-ration ensures your customer only pays for the exact amount of time they used your service. This keeps billing fair and transparent for everyone.

Pro-ration works by calculating the fee owed up to the cancellation date as a percentage of the total billing cycle.

Example

Imagine a subscription costs $90 with a monthly billing frequency (30 days). The customer decides to cancel on the 15th day of the cycle. The pro-rated fee is calculated as follows:

1. Determine usage percentage: Divide the days used (15) by the total days in the cycle (30).
2. Calculate final fee: Multiply the usage percentage (0.5) by the total price ($90).

The customer is only charged $45 for their actual usage, and any overpaid amounts are credited back.