How 8Pay Reduces Fees for Small Subscription Companies

3 min readJul 23, 2019

The B2C subscription market is, by all measurements, in rude health. 11 million companies in the US alone now service the needs of consumers, who, for a fixed monthly cost, have their needs replenished. Those needs can be eclectic, ranging from music streaming to shaving kits, perfume and wine.

Whether you’re needing your movie fix or your chocolate fix makes little difference from a transactional perspective: the process is identical. The customer will set up a recurring payment with the merchant, typically using credit or debit card or PayPal. Thereafter, funds are deducted from the customer’s account on a monthly basis, until such a time as they decide to cancel the agreement.

What’s good for the customer isn’t always good for the merchant however. Subscription sales is a high volume, low margin business. To ensure profitability, it is imperative that the merchant keeps fixed costs to a minimum. This includes the cost of postage and packing, for physically delivered goods, as well as the transactional fees levied by payment processors. This latter cost is higher than you might expect, and can prove particularly onerous to small companies, swallowing up much of their profits.

The hidden cost of subscription services

PayPal charges merchants 3.4% plus a flat 20 cents per sale for monthly sales of less than $2,000, dropping slightly to 2.9% for monthly sales between $2,000 and $8,000. This means that for a subscription item priced at $10, 5% alone will go to the payment processor. For Visa and MasterCard sales, the charges merchants are forced to pay aren’t much better. There’s typically a wholesale fee of 1.15% administered plus 10 cents per transaction, plus a $20 monthly fee. That’s right — B2C subscription companies must themselves pay to subscribe to the payment rails operated by the credit card giants. All told, B2C subscription companies will lose 4–5% on each transaction in the form of payment processor fees.

For small businesses seeking to build a sustainable subscription service without being held hostage by payment companies, there have been few other options up until now. Cryptocurrency, which was once seen as a viable alternative to fiat payment systems, has struggled to gain traction due to issues that include high volatility, UX, lack of adoption and, in the case of BTC, rising network fees. The fact that cryptocurrency, by design, is unsuited to recurring payments, has also precluded it from being used for subscription services up until now. All that has since changed, however.

A fairer alternative

Crypto payment solutions have evolved substantially since the first merchants began tentatively accepting bitcoin in 2012. The rise of blockchain networks with lower fees and smart contract functionality has enabled programmable money that mimics traditional currency, but without replicating the middlemen who take their cut. 8Pay’s crypto payment solution is the perfect case in point. Using a series of smart contracts, it enables merchants to create fixed and variable rate subscriptions for products and services. Funds are deducted on a pre-agreed basis, such as monthly, with tokens automatically sent from the customer’s wallet to the merchant’s. What’s more, those tokens can include stablecoins, eliminating the potential for loss due to volatility.

Despite the entire process occurring on-chain, integrating 8Pay into checkout is quicker and easier than adding PayPal or credit card support. 8Pay provides a user-friendly interface where the merchant can manage all of their incoming subscription payments. The real benefit to the merchant though comes in the form of the cost savings that 8Pay provides. With a flat fee of just 1% for subscription-based payments, 8Pay is 3–4 times cheaper than traditional payment services. For small businesses, those savings can add up to thousands of dollars per year, and be the difference between break-even and profit.

B2C subscription payments needn’t be costly. 8Pay is proof that when you eliminate intermediaries, it’s possible to create a payment system that guarantees a fair deal for both parties.




8PAY is an all-in-one payment protocol that enables quick and simple recurring transactions with digital currencies.