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Subscription models have the most potential for global expansion, but they also have a raft of unique challenges that can become stumbling blocks if you’re not prepared, says Patrick Unnold, VP Customer at Recurly, a subscription management company.

“One of the key pieces of advice that I offer our customers going international is to make sure they’re working with a payments partner that’s able to accept localized or regional payment within their target countries or target regions,” he says.

It’s about removing as much friction as possible in the subscription renewal process, which is the heart of the health of a subscription business, he explains. Cross-border payments are subject to higher scrutiny and are declined at a higher rate than regional payments, and that will directly impact your bottom line — as well as the cross-border fees that can be assessed on foreign companies.

A partner also helps you navigate the wildly differing tax laws that exist across countries, all with their own tricky rules and regulations and can be missed at your company’s great peril. A local tax partner or a tax service can provide those tax lookups and determine the tax reporting a business needs to be able to fulfill.

Privacy laws also need to be top of mind, particularly for companies expanding into Europe and also collecting data on their EU customers.

“It’s really important that merchants moving internationally are aware of regional laws, particularly when it comes to privacy, and they’re choosing partners that are compliant,” he says. “And not just individual compliance, but the chain of compliance that these new laws are requiring, down to subcontractors or suppliers within your line of business.”

One of the most significant values of a partner is that they can offload a fair amount of risk as well, if it has PCI compliance and vaults its merchants’ and customers’ credit cards. That means you can stay out of scope of PCI collection, because your partner bears that risk.

And along with making sure you’re able to accept payments in the way your customers wish or need to pay, it’s important that you’re able to communicate with them effectively. One of the main trends Unnold is seeing across internet commerce as a whole is an ongoing move toward mass personalization. But that only works if you’re able to communicate effectively, which makes localizing communications a key first step to making that mass personalization work.

“You can get by as an American company pushing English only, but you’ll severely limit your ability to expand into certain markets,” he says.

You need to ensure that localization doesn’t just mean providing a particular language, but also regionalization, so that you’re printing numbers in the right format and offering the right dialect for a particular region — he points out the difference between French in Montreal and French in Paris, or the difference in German that exists between Germany and Switzerland.

Having proper localization and applying that appropriately across all of your communications is also key. In other words, not just your marketing communications or your blog posts or updates about your product, but also in your billing communications, or in a dunning cycle. It could be about an upcoming renewal.

He uses the example of an international radio service that streams classical music across different formats to a variety of countries, which has seen multilingual communication dramatically reduce involuntary churn.

“Customers don’t just dismiss it as a spam email,” Unnold points out. “It’s actionable for them in their own target language.”

But sometimes not only is localization nice to have, it’s mandatory. For example, even though the EU has very standard invoicing practices and taxation processes, even if the rates are different, in certain countries whether you call something an invoice or call it a receipt has a tax implication for the end customer.

How do you know when it’s time to send in a local team? Unnold points out that some international markets essentially require a local team just to get traction, either because the markets have legal requirements about having a local office, or there are cultural requirements for a physical presence, speaking the language, and understanding the non-verbal communication as well — for instance, Japan and China.

But for some companies, it’s purely a revenue issue. When revenue exceeds a certain multiple of the perceived cost for putting a local team in that region, he’s seen companies send in a vanguard sales team, with some sales capacity, sales engineers, sales account executives, and some technical support.

The next step from a customer perspective, would be when you’ve built up enough demand for your services that your relationship management needs have to get more robust than the ad hoc strategies you have in place — from flying people in when needed to having all-night call centers and serving different time zones. Then it’s time to make the leap and start building out that team.

“Subscriptions are not just here to stay, but here to grow,” Unnold says. “The opportunities that this business model provides…I don’t think we’ve seen the tip of the iceberg yet.”

To learn more about what it takes to expand into new markets, how to tap into millennial and Gen X purchasing power across the globe, and the hottest places to get your foot in the door, internationally speaking, don’t miss this VB Live event!

Don’t miss out! 

Register here for free.

Webinar attendees will learn about:

  • The opportunities provided by the explosive subscription model growth around the globe
  • How to overcome regional challenges, including local payment methods, regulations, data security, and taxation
  • How to identify knowledgeable partners to accelerate your global expansion
  • How localized communications throughout the subscription lifecycle boost subscriber retention
  • Common fraud issues to anticipate and how to mitigate them


  • Patrick Unnold, VP Customer, Recurly
  • Luke Salinas, SVP Strategy, Adyen
  • Lily Varon, Analyst, Forrester
  • Rachael Brownell, Moderator, VentureBeat

Sponsored by: Recurly and Adyen