Understanding the Upcoming Changes in Paddle's Past Due Transactions
Hi, I'm Alex, and welcome back to the Boathouse Paddle Series, where we talk about everything concerning Paddle. Today, we're diving into an upcoming change detailed in the Paddle Developer Changelog. This change addresses a quirk in Paddle where you couldn't update a subscription when there was a past due transaction. Let’s unpack what this means for you and your business.
The Quirk in Paddle's Subscription Management
In Paddle, when a payment transaction fails, the associated subscription turns into a past due state. In this state, you can't:
- Update the Subscription: No modifications are allowed.
- Cancel the Subscription: Cancellation isn’t permitted.
- Pause the Subscription: Pausing is not an option.
Why This Happens
Paddle’s logic behind this restriction is to ensure that any past due payments are collected. If a customer has accessed your product or services, Paddle aims to collect payments for those periods. This process forces the customer to update their payment method, ensuring that the charges are successfully processed before they can make any changes, including cancellation.
It's a cleaner and financially responsible way to handle subscriptions. However, it does mean that if a customer wishes to cancel, they first need to resolve any past due payments, which might not be the seamless experience they expect.
They want you to update the payment method so that charge goes through, and then if you want to cancel, you can then decide what to do with the remaining credit or refund them or whatever.
What’s Changing?
Paddle has announced a change in how past due transactions are handled when you resume a subscription. Here's what you need to know:
- Current Behavior: When you resume a subscription with past due transactions, Paddle attempts to collect for previous periods. This may lead to overlapping periods where the customer is charged twice.
- New Behavior: If there is a past due transaction, resuming the subscription will result in the past due transactions being canceled. A new subscription period will start afresh without attempting to collect for the previous periods.
Implications of the Change
This change means that when you resume a subscription, Paddle will clear the account of past due transactions and start a new billing period. This adjustment avoids the issue of double-charging customers for overlapping periods.
An Interesting Observation
A noteworthy question arises: How do subscriptions get into a paused state with past due transactions? The documentation clearly states that you can't pause a subscription if there's a past due transaction. This implies a potential change in the platform's behavior, allowing for subscriptions to be paused even with past due payments.
While the changelog does not explicitly mention changes to cancellations, this tweak hints at a possible shift in how Paddle handles subscription states.
Looking Forward
This change is part of the upcoming API version release in September. It’s an exciting development, and we’re eager to see how it improves the user experience for both businesses and customers.
Stay tuned to see how these changes unfold and impact your work with Paddle.
Thank you for joining us today on the Boathouse Paddle Series. See you next time!
