Asking for card details when a trial starts
Whether a SaaS business should take card details when a trial period starts, what the trade-off is, and what happens in the books when a trial converts.
By Achekam · · 4 min read · For Software (SaaS) businesses in South Africa, Nigeria, Kenya
The sign-up page for a Cape Town scheduling app has one decision left before launch: should the trial ask for a card? The marketing lead wants as many sign-ups as possible and says a card field will scare people off. The finance lead points out that thousands of sign-ups who never pay do not keep the lights on.
Both are right, and the choice affects more than the sign-up form. It changes who enters the funnel, how the first payment is taken and what the books look like when a trial becomes a paying customer. This article sets out the trade-off and how the conversion is recorded.
How a trial works
Stripe explains that a trial period delays the first charge for a subscription, and the subscription becomes active automatically when the trial ends and the payment succeeds. It also explains that, unlike one-time payments, subscriptions need the customer's details and payment method to be kept for future billing cycles.
So a card-at-sign-up trial is really a subscription that starts with a delay. When the trial ends, the provider attempts the first charge; if it succeeds, the customer is paying. A no-card trial is different: when it ends, nothing happens unless the customer chooses to come back and pay.
Stripe Atlas describes low-touch SaaS as designed for most customers to buy without sustained one-on-one human contact, sold mainly through the website and e-mail marketing, often with a trial period, and generally on month-to-month subscriptions. That is the world in which the card question matters most, because there is no salesperson to nudge a trial user towards paying.
What the benchmarks say
Stripe Atlas gives benchmarks for low-touch trial conversion: roughly 1% as the baseline for competent execution when sign-up asks for no card at all, and roughly 40% when a credit card is required at sign-up.
Read those numbers carefully. They are benchmarks for the market Stripe writes about, not measurements for South African, Nigerian or Kenyan products, and they compare different populations. A card-required trial attracts fewer, more committed sign-ups; a no-card trial attracts many more people, most of them browsing. The conversion rate rises with a card partly because the people who would never have paid simply do not sign up.
The trade-off
| No card at sign-up | Card at sign-up | |
|---|---|---|
| Sign-ups | More | Fewer |
| Conversion to paid | Lower | Higher |
| Who signs up | Browsers and serious buyers | Mostly serious buyers |
| What converting takes | The customer must act | Happens automatically unless they cancel |
| Risk | Effort spent on people who never pay | Customers who forget to cancel and later dispute the charge |
There is a quality question too. Harvard Business Review, in a 2014 article on keeping the right customers, warns that a high churn rate is often the result of poor customer acquisition, because heavy upfront price promotion attracts deal seekers who leave when they find a better deal elsewhere. A trial is a kind of promotion. If your trials attract people who only ever wanted something for nothing, the paying customers they produce may not stay long either.
Some practical middle paths:
- ask for a card only on the plans aimed at businesses, where buyers expect it;
- remind trial users clearly before the first charge, so nobody is surprised;
- make cancelling during the trial easy, which reduces disputes later.
Stripe Atlas's guide to how SaaS businesses work covers low-touch and high-touch selling, the economics behind them and the levers for growth, including these trial benchmarks.
Card-on-file trials and Achekam
If you want a card-at-sign-up trial that converts automatically, it has to run in a payment provider's own subscription tools. Achekam never charges a business's customer automatically: there are no saved cards or debit orders, and credit-control reminder e-mails carry no pay link. That is a limit to plan around, not a setting to switch on.
What Achekam does handle is the invoice and the payment record once a customer is paying. A business can take Stripe Checkout payments in ZAR, USD, EUR or GBP, with webhooks accepted only when their signature is valid and recent. So a business that runs no-card trials can convert a trial user by sending the first invoice with a payment link.
When the trial converts: the first paid invoice
The first invoice marks the start of the customer's paid life, and it should be clean.
- Issue the invoice. A business creates customer invoices as drafts it can change or delete. Issuing one takes the next number in the sequence and posts it to the ledger as debtors, sales and output VAT.
- Take the payment. The customer pays through the payment link on a provider such as Stripe Checkout.
- Record the receipt. A verified gateway payment is recorded as a receipt against the invoice, debiting that gateway's clearing account and crediting trade receivables, and the invoice shows as paid or part-paid. The amount is checked against what the link asked for, and a repeated notification never pays twice.
The invoice and the payment reach the books without anyone retyping them. If the first invoice covers a year rather than a month, part of it is not yet earned; monthly or annual billing covers that choice, and failed subscription payments covers what happens when the first or a later payment does not go through.
Look at last quarter's trial sign-ups, count how many became paying customers and how many of those are still paying, and use those two numbers, not a benchmark, to decide whether the card field belongs on your sign-up page.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
