8 biggest billing challenges for web hosting providers in 2020
The web hosting market around the world will grow at a CAGR of 15.9% to reach a market value of $76.2 billion by 2023, as per a report by Market Research Future (MRFR).
Web hosting is one of the biggest business sectors in the IT industry, including numerous services for individuals, bloggers, and businesses of all sizes. These services include domain names, shared hosting, WordPress hosting, cloud hosting, SSL certificate, CDN, and many more.
Over the last few years, the competition among web hosting providers has increased. This is because of the rise in the number of online businesses looking for solutions to build their websites. Now, the web hosts are continuously improving the things on their end, lowering the prices, offering add-ons, and better support to beat the competition.
However, they are still stuck with several challenges related to the billing. As more and more customers sign up and buy web hosting services, the complexity increases at the billing end. Furthermore, the market is now filled with a broader set of services, rather than just shared hosting and domain names.
Billing challenges for web hosting businesses
To beat the competition and make things easier for business, the web hosts have to overcome their billing challenges. In this article, we have curated the top billing challenges for web hosting providers.
1. Lack of integration between systems
Web hosters today are lacking the right tools or solutions that can help them integrate the multiple processes of their business. These processes include link between shopping cart and payment gateway, connection between payment gateway and billing system, and so on.
Without the proper integration between these processes and systems, it becomes difficult for the different teams to manage things and provide reliable support to customers. The right web hosting business tools can help in establishing the proper integration, right from the time of customer onboarding, shopping cart, billing system, and to provisioning of services.
2. Delays in payment
One of the biggest challenges for web hosting providers today is the delays in payment by customers. Whether it is an SMB or a large enterprise, delayed payments always impact the operations and cash flow in a negative manner. This is all the more challenging for the new businesses who are dependent on the regular cash flow by customers.
They need a solution which can help them to overcome this challenge right from onboarding the customer to delivering invoices, mailing reminders, to simplifying the overall payment process. Web hosts can use billing tools like WHMCS, Hostbill, or UberSmith to address this challenge and get the things going in a simpler manner.
3. Offering add-ons
To gain a competitive edge in the market, the web hosting providers have to be unique and provide additional products, offers and other such things to upsell the services. For example, if a customer is using shared hosting from a particular hosting provider, then it will be a great idea if that hosting provider offers SSL certificate on discount if the customer buys shared hosting for multiple years instead of one year.
Handling of invoices for such customizations and offering of add-on services are difficult to handle for billing teams. They have to check things and take care of everything on their own, unless they use the right billing tools that can manage custom orders.
4. Identification of fraud orders/transactions
Security issues and fraud are the new norms in today’s era of digital transformation. Almost every online business is facing this challenge and things are the same for web hosts. Fraud orders and transactions can’t be identified or detected unless the billing teams work on such transactions.
They need to find such orders even before their occurrence or simply avoid having to accept fraud transactions. Implementation of billing tools that can help in avoiding or detecting fraudulent orders will prove to be a boon for billing teams.
5. Handling tax and VAT
Regardless of the country of operation, you have to manage and handle the charging of accurate tax and VAT for the customers. It’s a tough task for the billing and finance teams to accurately handle all the transactions with tax on the basis of country of operation.
Use of a software like WHMCS and using the right WHMCS themes for web hosting providers can solve this challenge.
Suggested reading: Enabling Automated Backups in WHMCS (Importance and methods)
The requirements of web hosting services keep on changing for the customers. A customer who has chosen shared hosting plan might switch to dedicated hosting or cloud server in the next months. In such cases, they will change their service plan and package, which means you have to upgrade the billing process.
If the billing process is not seamless and convenient, the customers may leave and go to other service providers. Having a seamless billing is yet another big challenge for the web hosts. Automation of such upgrades and customizations can help in addressing this challenge.
7. Accepting local payments
Good businesses are those who provide their customers the payment options of their preference. It is not a good practice to accept payments only using the options of your choice. Not all customers prefer to pay via debit or credit cards. Not all of them might be comfortable with PayPal. You have to take care of their preference and provide them local payment options as well, such as PayTm in India.
But challenge here is that you need to have support for all the payment options. For this, you should use tools that support most of the top and preferred payment gateways and merchant processors. Don’t let a customer go because he/she can’t find a payment option of their choice or preference.
8. Supporting multiple currencies
While USD is the most common currency used by businesses today, but if a customer from different country whose local currency is no dollar is looking to buy services from you, how will he do that? That’s why it is essential to support multiple currencies, which are used mostly or on the basis of the countries where you operate.
However, the management and invoicing of orders with multiple currencies is one of the biggest challenges for web hosting providers. They need to use some automation software or tool for that.
If you are looking to use a billing software for your web hosting business, then always look for this feature so that you can provide support for multiple currencies and accept local payments easily.
Handing over to you:
These are a few of the biggest challenges for web hosting providers today. By using an automated billing solution, best web hosting themes, and other essentials, the service providers can address these challenges.
If you have any query, let us know via the comments below.