Critical market data and benchmarks showing why automated collections and intelligent retry strategies matter for subscription and usage-based billing success
Dataintelo estimates the failed payment recovery market reached $7.2 billion in 2024, while LexisNexis Risk Solutions reports that 1 in 10 cross-border payments fails on its first attempt, according to its 2026 financial-institution study. Failed payments are a material source of addressable revenue leakage in SaaS. For companies running usage-based or hybrid billing models, Orb's Collections Automations centralize payment retries, reminders, customer emails, and webhooks in configurable workflows.
Key takeaways
- Failed payments create massive revenue risk: LexisNexis Risk Solutions estimated that failed payments cost the global economy $118.5 billion in 2020
- Failed payments can create material customer and revenue losses: In a 2026 LexisNexis Risk Solutions study, one-third of surveyed financial institutions reported losing 2-5% of customers through failed payments, while three-quarters of surveyed financial institutions reported losing up to $5 million per year in customer revenue because of failed payments
- Payment-data validation can improve processing performance: Two in five financial institutions using payment-data validation reported straight-through-processing improvement above 25%
- Processing performance is tied to retention: 90% of surveyed financial institutions said strong straight-through-processing rates positively affect customer retention
- Payment failures can interrupt transaction completion: In Stitch research covering 3,000 South African consumers, 62% of those consumers who encountered a payment failure did not return to complete the transaction
- Dataintelo projects continued market growth: Dataintelo projects the failed payment recovery market to reach $21.1 billion by 2033
Understanding the impact of failed payments on subscription revenue
Failed payments are a significant and addressable source of recurring-revenue risk. Understanding the scope of this problem is the first step toward building effective recovery systems.
Market size and growth projections
1. Failed payment recovery market reached $7.2 billion in 2024
Dataintelo estimates the global failed payment recovery market reached $7.2 billion in 2024, reflecting the scale of the market category.
2. Market projected to reach $21.1 billion by 2033
Dataintelo projects the failed payment recovery market to hit $21.1 billion by 2033, representing a near tripling of its estimated 2024 market size.
3. Industry growing at 12.8% CAGR
Dataintelo projects the failed payment recovery market to expand at a CAGR of 12.8% from 2025 to 2033.
4. Business Research Company values market at $6.16 billion in 2025
The Business Research Company separately estimates the global failed payment recovery market at $6.16 billion in 2025, with projections to reach $11.15 billion by 2030.
The true cost of revenue leakage
5. Failed payments cost the global economy an estimated $118.5 billion in 2020
LexisNexis Risk Solutions estimated that failed payments cost the global economy $118.5 billion in 2020.
6. One-third of financial institutions report losing 2-5% of customers through failed payments
In its 2026 True Impact of Failed Payments study, LexisNexis Risk Solutions reports that one-third of surveyed financial institutions lose 2-5% of customers through failed payments.
7. Three-quarters of financial institutions lose up to $5 million per year in customer revenue because of failed payments
LexisNexis Risk Solutions reports that three-quarters of surveyed financial institutions lose up to $5 million per year in customer revenue because of failed payments.
8. 37% of financial institutions incur more than $20 per failed or delayed payment
LexisNexis Risk Solutions reports that 37% of surveyed financial institutions incur more than $20 for each failed or delayed payment.
9. More than 70% of surveyed payment executives were dissatisfied with their payment failure rate
In an independent study conducted by Capgemini Invent for LexisNexis Risk Solutions, more than 70% of respondents were dissatisfied with their payment failure rate.
10. Declined credit cards were reported as the major cart-abandonment issue at 52.2% in a South African market study
Mastercard reports that declined credit cards were cited as the major cart-abandonment issue at 52.2% in the referenced South African online-retail research.
What is dunning and why is it essential for subscription management?
Dunning refers to the systematic process of communicating with customers about failed payments and attempting to recover those transactions through retry logic, notifications, and payment method updates. Effective dunning management combines automated retries with strategic customer communication.
Dunning software market growth
11. Dunning management software market reached $1.35 billion in 2024
Dataintelo estimates the global dunning management software market reached $1.35 billion in 2024.
12. Market projected to reach $4.03 billion by 2033
Dataintelo projects the dunning management software market to reach $4.03 billion by 2033, growing at a 13.8% CAGR.
13. Cloud-based deployment accounted for more than 62% of market revenue in 2024
Cloud-based deployment accounted for more than 62% of dunning management software market revenue in 2024, with Dataintelo projecting 15.2% CAGR through 2033.
Regional market distribution
14. North America accounted for more than 38% of global market revenue in 2024
Dataintelo estimates North America captured approximately $2.74 billion of the failed payment recovery market in 2024, representing more than 38% of global revenue.
15. Europe generated $1.98 billion in 2024
Dataintelo estimates Europe generated around $1.98 billion in failed payment recovery market revenue in 2024.
16. Asia Pacific growing at 15.2% CAGR
Dataintelo identifies Asia Pacific as the fastest-growing region, with a projected CAGR of 15.2% through 2033.
Key dunning statistics: payment failures and recovery operations
Operational benchmarks vary by source, payment flow, and methodology. The figures below preserve the scope and attribution of the cited sources rather than treating them as universal industry benchmarks.
Payment failure and processing benchmarks
17. 1 in 10 cross-border payments fails on its first attempt
LexisNexis Risk Solutions reports that 1 in 10 cross-border payments fails on its first attempt in its 2026 study of financial-institution payment executives.
18. Two in five financial institutions using payment-data validation report STP improvement above 25%
LexisNexis Risk Solutions reports that two in five surveyed institutions using payment-data validation report straight-through-processing improvements above 25%.
19. Incorrect beneficiary information causes 21% of failures
LexisNexis Risk Solutions reports that incorrect beneficiary information causes 21% of payment failures, while account-number issues and bank-detail issues each account for about 15%.
20. Only 2% of financial institutions report near-100% STP for cross-border payments
LexisNexis Risk Solutions reports that only 2% of surveyed institutions achieve near-100% straight-through processing for cross-border payments, while 9% report STP above 95% for cross-border payments.
21. Four in five financial institutions are dissatisfied with current STP rates
LexisNexis Risk Solutions reports that four in five surveyed institutions are dissatisfied with their current straight-through-processing rates.
Recovery operations
22. 90% of financial institutions say strong STP rates positively affect customer retention
LexisNexis Risk Solutions reports that 90% of surveyed financial institutions say strong straight-through-processing rates positively affect customer retention.
23. At 10,000 cross-border payments per day and 95% STP, 500 payments would still require daily intervention
LexisNexis Risk Solutions illustrates that a typical institution processes around 10,000 cross-border payments daily. At a 95% straight-through-processing rate, 500 payments would still require daily intervention. At the $12.10 average cost, that can exceed $6,000 per day, or approximately $2.2 million per year.
24. A 2023 report found 94% of ecommerce firms outsourced some or all payment recovery
A 2023 PYMNTS Intelligence report published in collaboration with Nuvei found that 94% of ecommerce firms outsourced some or all failed-payment recovery solutions.
Recurring payment and subscription behavior
Visa and Mastercard research provides additional context on how recurring-payment failures, unclear subscription information, and cancellation friction affect consumers.
25. 18% of Gen Z respondents in Visa's UK survey experienced failed bill payments via Direct Debit
In Visa's UK survey, 18% of Gen Z respondents experienced failed bill payments via Direct Debit, while 14% experienced failed subscription payments.
26. 11% of surveyed UK consumers avoided a purchase or subscription because of past payment issues
Visa reports that 11% of surveyed UK consumers had avoided a purchase or subscription because of past payment issues, with 20% among Gen Z respondents.
27. 29% of global consumers had disputed a recurring payment they believed was fraudulent
Mastercard reports that 29% of global consumers had disputed a recurring payment they believed was fraudulent, while 25% had blocked a payment they believed was fraudulent.
28. 67% say they would dispute fewer charges if subscription information were visible in their banking app
Mastercard reports that 67% of consumers say they would dispute fewer charges if subscription information were visible in their banking app.
29. 34% would stay subscribed if they could pause rather than cancel
Mastercard reports that 34% of consumers would stay subscribed if they could pause a subscription rather than cancel it.
Tackling declined credit cards: common reasons and solutions
Understanding why payments fail is essential for building effective recovery strategies. Different failure types require different approaches.
Payment failure rates by scenario
30. A PYMNTS Intelligence and Nuvei study reported an 11% ecommerce transaction failure rate
A PYMNTS Intelligence and Nuvei study reported that 11% of ecommerce transactions in the prior year failed.
Improving customer retention by minimizing churn from failed payments
Failed payments do not just cost immediate revenue. They can damage customer relationships and create negative brand experiences that compound over time.
Customer behavior after payment failures
31. 62% of surveyed South African consumers did not return to complete the transaction after a payment failure
In Stitch research covering 3,000 South African consumers, 62% of shoppers who encountered a payment failure did not return to complete the transaction.
32. 35% of cardholders are likely to abandon a merchant after a decline
PYMNTS reports that 35% of cardholders are likely to abandon a merchant after experiencing a card decline.
33. 41% will never return after a false decline
ClearSale reports that 41% of consumers will never return after a false decline.
34. 32% share frustration on social media after a false decline
ClearSale reports that 32% of consumers share their frustration on social media after a false decline.
Operational and retention impact
35. 64% of surveyed payment executives say broken or failed payments negatively affect staff workload
LexisNexis Risk Solutions reports that 64% of surveyed payment executives said broken or failed payments negatively affect staff workload.
36. 60% of organizations have lost customers to failed payments
LexisNexis Risk Solutions reports that 60% of surveyed organizations have lost customers due to failed payments, showing that the issue is widespread.
Orb's Spend Controls can alert customers as they approach spend thresholds or require top-ups, while its Experience Kit provides usage and pricing experiences that help customers understand and anticipate spend. These capabilities can help customers anticipate costs and avoid surprise bills.
The role of advanced billing software in enhancing payment success rates
Modern billing infrastructure shapes how teams execute payment recovery. Configurable collections workflows let teams tailor retries, reminders, and communications by invoice criteria rather than applying one static schedule.
Cost of failed payments
37. An illustrative iPiD scenario assumes a $200 resolution cost per failure
In an illustrative cross-border-payment scenario, iPiD assumes a $200 resolution cost per failure.
38. Each rejected or repaired payment costs $12.10 on average
LexisNexis Risk Solutions reports that each rejected or repaired payment costs businesses around $12.10 on average, based on its study of 400 payment executives.
Orb's Finance Workflows support customizable dunning rules, payment retries, and customer emails for overdue or failed payments.
Optimizing dunning workflows with integrations and automation
Effective dunning depends on coordination between billing systems, payment processors, and customer communication tools. Configurable workflows can centralize these steps and make collections execution more consistent.
The case for automation
Orb's Collections Automations, available to Orb customers on the Enterprise Plan, provide:
- Configurable collections schedules and rules based on plan, payment method, customer attributes, and other invoice criteria
- Automated collections steps that can combine payment retries, customer emails, and webhooks
- Collections webhooks that route workflow events into downstream systems
- Invoice-level automation timeline showing the applied schedule, completed steps, and upcoming actions
Orb's Stripe integration can sync invoices to Stripe Invoicing or use Stripe as a payment gateway.
Separately, Orb's Spend Controls can alert customers as they approach spend thresholds or require top-ups. Orb's billing engine supports usage-based and hybrid models, while its Experience Kit provides pricing calculators and usage dashboards that help customers predict and understand pricing while planning and optimizing usage. Configurable collections workflows can help manage collections around those invoices.
Frequently asked questions
What is the average success rate for dunning processes?
The sources cited here do not establish a universal average success rate for dunning. Recovery outcomes vary by payment flow, failure reason, payment method, geography, and workflow design, so the cross-border payment and straight-through-processing statistics in this article should not be treated as dunning recovery-rate benchmarks. Orb's Collections Automations let teams configure collections workflows by plan, payment method, or specific account and combine customer emails, payment retries, and webhooks in custom schedules.
How do usage-based billing models affect payment recovery strategies?
Orb's Experience Kit provides pricing calculators and usage dashboards that help customers predict and understand pricing while planning and optimizing usage. Billing and collections strategies can include threshold billing that triggers an invoice when a customer reaches a set dollar threshold, spend alerts, and usage dashboards that help customers anticipate costs.
What are the most common reasons for credit card declines and how can they be prevented?
The sources cited in this article identify failed-payment causes including insufficient funds and expired cards, as well as network errors and fraud alerts. The appropriate prevention or recovery action depends on the cause. Orb's Collections Automations can execute configurable payment retries, customer emails, and webhooks as part of a collections workflow.
Can automated dunning truly replace manual follow-ups for failed payments?
Automated dunning can handle repeatable failed-payment workflows at scale. Orb's Collections Automations can combine configurable invoice criteria, payment retries, customer emails, webhooks, and invoice-level automation history in one workflow system. Teams can automate repeatable collections steps while using personalized outreach for strategic accounts or exceptional cases.
How does robust billing infrastructure contribute to better payment recovery?
Modern billing infrastructure can support recovery through retry scheduling, payment-status webhooks, configurable dunning workflows, and persistent workflow history. Orb's Collections Automations combines configurable schedules, payment retries, customer emails, webhooks, invoice targeting, and invoice-level automation history in one workflow system.