Industry Statistics on Failed Payment Failures and Revenue Impact

• High Decline Rates: Recurring payments see significant failure rates. Visa/Mastercard data indicates ~15% of recurring payment attempts are declined on average, with some industries facing double that rate (~30%)chargebee.com. Surveys of subscription businesses have found even higher averages – around 35% of transactions fail, and in worst cases failure rates can exceed 70%chargebee.com. This leads to substantial involuntary churn (when customers unintentionally drop off due to payment issues). In fact, over 53% of subscriber churn is attributed to failed paymentsindebted.co, making payment failure the single biggest cause of cancellation for many subscription services.

• Lost Revenue and Churn Costs: The revenue at stake from failed payments is enormous. One analysis projects that involuntary churn could cost subscription companies $129 billion in lost revenue in 2025recurly.com. This corresponds to roughly an 8.6% revenue loss for the $1.5 trillion subscription industry (since businesses that implement advanced churn prevention tools recoup about 8.6% more revenue on average)recurly.com. Similarly, PYMNTS data shows that if subscribers experience service interruptions due to payment failure, they are 27% more likely to cancel – costing businesses an estimated ~9% of annual sales on averageindebted.co. In other words, nearly a tenth of revenue can vanish due to avoidable payment failures.

• Business Impact: Every subscription business feels the pain of failed transactions. In a 2024 Forrester Consulting study, 100% of surveyed subscription brands reported negative impacts from failed paymentsrecurly.com. Hard impacts include lost revenue (reported by 61% of companies) and decreased customer lifetime value (65%) due to involuntary churnrecurly.com. Soft impacts are damaged customer relationships (53% cite this) and harm to brand perception (45%)recurly.com. The problem also drains resources – 45% of subscription businesses spend at least 5 hours per week managing failed paymentschargebee.com. Clearly, improving payment success rates is critical for revenue retention and customer loyalty.

Payment Orchestration Capabilities of Leading PSPs (Stripe, Adyen, Checkout.com)

Modern Payment Service Providers (PSPs) are starting to offer built-in orchestration features to maximize successful transactions and recover failed payments. Key capabilities include routing of transactions and easy integration of multiple payment methods or processors. Below we compare how Stripe, Adyen, and Checkout.com – three leading PSPs – address payment orchestration and failed payment recovery:

Stripe – Smart Retries and Adaptive Acceptance

• Adaptive Acceptance (AI for Approvals): Stripe uses machine learning at the authorization stage to reduce false declines. Its Adaptive Acceptance feature will automatically retry certain network declines in real time, applying optimized payment routing or authentication on the fly to turn a potential decline into an approvalstripe.com. This helps improve the initial authorization success rate for subscription charges before a failure happens.

• Smart Retries (ML-Based Dunning): For recurring charges that do fail, Stripe Billing offers Smart Retries – an AI-driven retry logic that schedules follow-up attempts at the optimal times and dates. Stripe reports that, on average, businesses using its recovery tools recover about 57% of failed recurring payments, and those enabling Smart Retries recover 11% more revenue than those using a static retry schedulestripe.com. The machine learning model considers 500+ attributes (customer behavior, past declines, time of day, etc.) to choose the best retry strategystripe.comstripe.com. This significantly increases the chance of a successful charge on subsequent attempts.

• Auto-Card Updater and Network Tokens: Stripe automatically updates stored card details via card network updater services (e.g. Visa Account Updater) and encourages the use of network tokens (secure card tokens that stay current when cards expire or are replaced). These measures reduce the incidence of declines from expired or replaced cards, improving continuity of subscription payments (no manual intervention by the customer).

• Results and ROI: Stripe highlights strong outcomes from its orchestration features. For example, Stripe’s internal data shows Smart Retries can recover about $9 in revenue for every $1 spent on Stripe Billingstripe.com – a 9x ROI in revenue retention. Case studies like InVideo have seen their subscription renewal recovery rate improve from 23% to 30% (a 30% relative uplift) after enabling Stripe’s optimizationsstripe.com. Overall, Stripe’s payment reliability features are aimed at cutting involuntary churn (nearly 25% of churn is due to failed payments by their estimatesstripe.com) through automation and machine learning.

Adyen – RevenueAccelerate and Intelligent Routing

• Unified Global Platform: Adyen provides a single payments platform (acting as gateway, processor, and acquirer in one) with built-in global routing optimizations. Because Adyen connects directly to card networks and local banking networks worldwide, it can dynamically route transactions via the path most likely to get approved (or the lowest cost path) without the merchant managing multiple providers. For example, Adyen’s system can choose between processing a U.S. debit card transaction via the Visa/Mastercard network or a local debit network based on cost and success rate. In one analysis, Adyen’s intelligent debit routing achieved ~26% cost savings while slightly increasing approval rates (+0.22%) for U.S. card paymentsprnewswire.com.

• RevenueAccelerate Suite (AI Optimization): RevenueAccelerate is Adyen’s AI-driven optimization suite that tackles payment failures and churn. It includes tools like Auto Rescue for smart retries, account updater services, and data-driven routing rules. Auto Rescue automatically retries declined subscription payments on the merchant’s behalf, using machine learning to optimize timing and frequency of retriesadyen.com. This feature required minimal effort to implement and showed statistically significant uplift in A/B tests for merchantsadyen.com. A client testimonial notes “Auto Rescue uses machine learning to ensure our revenue collection continuously improves” and praised the full visibility it provides into the recovery processadyen.com.

• Card Updater & Data Enrichment: Adyen leverages card scheme services to reduce hard declines. For instance, Adyen integrated Mastercard’s Automatic Billing Updater (ABU) to refresh stored card credentials in real-time, increasing card-on-file approval rates by ~2.5% for merchantsdeveloper.mastercard.com. Adyen also enriches transactions with additional data (like address info, 3DS authentication when needed, etc.) to increase the likelihood of issuer approval. Its AI continuously learns from billions of data points to fine-tune messaging formats, currency routes, and fraud checks for maximum authorization ratescheckout.com.

• Dynamic Risk & Cost Balancing: Adyen’s platform uses AI not only for boosting conversion but also for controlling fraud and cost. By analyzing each transaction, it can decide whether to apply 3D Secure, when to split or route payments for cost efficiency, and even whether to retry or not (to avoid unnecessary fees on hopeless attempts). Adyen claims merchants can save up to 5% on total payment costs by using its optimization features (e.g. routing to the cheapest path, avoiding redundant retry fees, etc.)adyen.com. In practice, merchants have seen meaningful lifts – for example, Nord Security improved conversion on customer payments by 10% using Adyen’s AI-driven checkout and routing optimizationsadyen.com.

• Ease of Adding Methods/Regions: Since Adyen is an all-in-one PSP, adding new payment methods (digital wallets, local payment options) or expanding to new regions is handled through the same platform. Merchants avoid the complexity of integrating a new provider for each country. Adyen supports 250+ payment methods out-of-the-box. If a merchant’s payment fails via one route (e.g. one acquiring connection), Adyen’s system can automatically try alternative routes (different acquiring BIN or network) behind the scenes. This provides a form of cascading failover without the merchant needing multiple PSP contracts.

Checkout.com – Intelligent Acceptance and Multi-PSP Flexibility

• AI-Powered “Intelligent Acceptance”: Checkout.com offers an orchestration engine called Intelligent Acceptance, which uses advanced AI models (trained on 20+ billion data points from its network) to optimize each payment in real timecheckout.com. It performs “numerous optimizations at every step of the payment journey”checkout.com – for example, automatically formatting transaction messages to meet issuer preferences, selecting the best local acquiring route, applying or skipping security protocols based on context, and leveraging tokenization/updaters to prevent avoidable declines. As a result, Checkout.com reported that in 2024 this engine executed 60 million real-time payment optimizations per day, raising merchants’ acceptance rates by an average of 3.8%checkout.comcheckout.com. Since its 2023 launch, Intelligent Acceptance has unlocked over $10 billion in additional approved transactions for merchantscheckout.com – tangible evidence of reducing failed payments through AI.

• Smart Routing and Cascading: Checkout.com’s platform is built to route transactions intelligently across different processing paths or even between multiple providers if needed. It can automatically route each payment to the “most effective processor” or network based on factors like card type, geography, and historical success ratescheckout.comcheckout.com. For example, a transaction might be sent through a domestic acquiring partner for higher approval odds, or rerouted to an alternate provider if the primary acquirer is down. This smart routing maximizes the chance of success and can also minimize fees by choosing the least costly pathcheckout.com. (Checkout.com notes that not all PSPs allow this level of flexibility – some providers may lock merchants in to their own routes – but its approach is to give merchants control to optimize outcomescheckout.com.)

• Easy Integration of New Payment Options: To reduce the burden of adding new payment methods or processors, Checkout.com provides tools like Forward API and “Flow” integration. The Forward API allows merchants to securely vault customer payment details with Checkout.com and then transmit them to a different PSP if needed, enabling a multi-PSP strategy without frictioncheckout.com. Meanwhile, Checkout.com Flow is a pre-built frontend integration that lets merchants “activate new payment methods whenever you need them” with minimal developmentcheckout.com. This modular approach means businesses can plug in alternative payment providers or local payment options quickly (for example, enabling a local eWallet for a region by toggling it on). Failover mechanisms are also supported – if a payment fails with one gateway, the system can automatically retry with another provider, enhancing resilience against outagesgr4vy.com.

• Recurring Payment Tools: For subscriptions, Checkout.com incorporates network tokens and Real-Time Account Updater services as part of its Intelligent Acceptance suitecheckout.com. These ensure that saved card details are current (updates for expired/reissued cards are pulled in real time) and that transactions use tokenized credentials recognized by issuers – both of which improve authorization rates for recurring charges. Checkout’s platform also gives detailed analytics on payment outcomes, so merchants gain visibility into why payments fail (something 65% of merchants lack when using basic PSP setupscheckout.com). Armed with this data, merchants can adjust their strategies or let the AI engine automatically adjust the routing and retry rules.

• Multi-PSP Strategy Support: Checkout.com acknowledges that sometimes using multiple PSPs yields benefits like higher authorization rates and lower costs. Its platform is designed to accommodate this: merchants can measure acceptance rates across providers and route traffic accordinglycheckout.comcheckout.com. The benefits include resilience (backup in case one PSP has an outage) and localized acquiring (using a PSP with a license in a target country for better approval odds)checkout.com. By providing a single integration point that can orchestrate multiple payment partners, Checkout.com serves as both a PSP and a payment orchestration layer. This approach lets merchants “test drive” different processors and dynamically shift transactions to the one performing bestcheckout.com – all while managing reporting in one place. In summary, flexibility is a core focus: routing, cascading failovers, and quick addition of new payment routes are built into Checkout.com’s solution to maximize successful payments.

(Each of these PSPs also emphasizes security and compliance – e.g. machine-learning fraud detection, PCI compliance, SCA (3-D Secure) optimizations – to ensure that increasing your acceptance rate doesn’t come at the expense of higher fraud or regulatory issues. The orchestration systems are tuned to balance approval vs. risk intelligently.)

AI-Driven Failed Payment Recovery Case Studies (FlyCode)

In addition to PSP-native features, specialized smart payment orchestration platforms like FlyCode have emerged to help merchants recover failed payments using AI. FlyCode works alongside existing processors (it can connect to your Stripe, Adyen, etc. accounts via API or app) to apply advanced machine learning models for dunning (retrying charges) and customer outreach, all aimed at recapturing revenue that would otherwise be lost to payment failuresflycode.comflycode.com. Several publicly documented case studies illustrate the impact of AI-driven orchestration on payment recovery:

• Framer (Web Design SaaS): By deploying FlyCode’s ML-driven retry and email strategy, Framer achieved a 6% lift in ARR and an 18%+ increase in payment recovery rate within 2 monthsflycode.com. The tailored approach (identifying at-risk subscribers and timing retries optimally) led to a 45% increase in the amount of revenue recovered compared to their previous best monthflycode.com. “FlyCode has been a great help in improving our recovered revenue…they do the hard work with all the optimizations,” says Framer’s product leadflycode.com.

• BUBS Naturals (Subscription E-Commerce): This D2C brand saw its failed payment recovery rate improve from 51% to 66% in just one month after implementing FlyCodeflycode.com. That jump in recovery (a 15 percentage-point increase) translates to a major reduction in involuntary churn and revenue leakage. The co-founder noted that nothing they tested internally could compete with the results of FlyCode’s AI – it recovered more revenue and saved the team hours of manual work each weekflycode.com.

• PlixLife (Subscription Nutrition): Before, failed credit cards led to significant churn for this company. After using the AI orchestration, PlixLife achieved a 12× increase in recovered payments and reduced involuntary churn by 9% of their subscriber baseflycode.com. This improvement delivered a 21% ROI on their investment in the technologyflycode.com. Essentially, for every $1 spent on FlyCode, they got $1.21 back in retained revenue, in addition to keeping those subscribers active.

• Just Meats (E-Commerce): This merchant integrated FlyCode’s smart retry system and saw an exponential improvement – a 40× increase in successful payment recoveries (from a very low baseline to almost forty times more recoveries after optimization)flycode.com. Consequently, their passive (involuntary) churn dropped by 33%flycode.com, meaning one-third of the customers who would have been lost due to payment failures were retained. The ROI here was reported at 62%flycode.com, indicating a significant net gain from the initiative.

• Other Notable Results: Across FlyCode’s client base, improvements are consistently seen in both authorization rates and revenue recovery. For example, Cymbiotika (a supplements brand) cut involuntary churn by 25% while boosting recovered payments by 22%, yielding a 24× recovery increase vs. their previous processflycode.com. Another brand in the healthy snacks space improved its payment recovery by 21% and achieved a 6× ROI (sixfold return) on the programflycode.com. FlyCode often guarantees a positive ROI — in Framer’s case they even offer money-back if a substantial recovery uplift isn’t realizedflycode.com. The platform’s typical impact is to raise successful retry rates into the 70–80%+ range of recoverable transactions (many clients go from recovering ~50-60% of failed payments to well over 80% after optimizationflycode.comflycode.com).

Key takeaways: Smart payment orchestration can materially improve failed payment recovery. Industry stats show the scope of the problem – millions in revenue and large chunks of churn are tied to payment failures – but by using features like intelligent routing, cascading retries, account updaters, and machine learning algorithms (trained on vast payment data), companies can recapture 10%+ of revenue that would otherwise be lost. Leading PSPs like Stripe, Adyen, and Checkout.com have incorporated such capabilities (e.g. Stripe’s Smart Retries, Adyen’s Auto Rescue, Checkout.com’s Intelligent Acceptance) to boost authorization and renewal success rates. Moreover, dedicated AI orchestration tools like FlyCode demonstrate significant uplifts in real-world scenarios – often double-digit improvements in recovery rates and corresponding drops in churn. In summary, failed payment recovery is no longer just a collections exercise but a data-driven optimization problem: leveraging smart orchestration can turn a leaky revenue “bucket” into a revenue retention opportunity, directly impacting the bottom linerecurly.comindebted.co.

Sources:

• Industry Reports & Surveys on Payment Failures – Recurly press release on involuntary churn impactrecurly.com; Chargebee survey blogchargebee.com; PYMNTS/InDebted analysisindebted.coindebted.co; Forrester Consulting findings via Recurlyrecurly.comrecurly.com; Visa/Mastercard recurring decline benchmarkschargebee.com.

• Product Documentation – Stripe Billing feature pagestripe.com and developer blogstripe.com; Adyen’s AI optimization overviewadyen.comadyen.com and Auto Rescue announcementadyen.com; Checkout.com smart routing and Intelligent Acceptance reportscheckout.comcheckout.comcheckout.com.

• Case Studies – FlyCode official case studies for Framer, PlixLife, Just Meats, etc.flycode.comflycode.comflycode.com; FlyCode website and testimonialsflycode.com. Each demonstrates measurable improvements in recovery rates, churn reduction, and ROI from AI-driven payment orchestration.