Stripe · Product sense · Mid · 45 to 60 minutes

Reduce Failed Payment Churn in Billing

Stripe is a payments and financial infrastructure company that helps businesses accept payments and run online revenue operations. Answer this product management case and get it graded line by line against a weighted rubric.

product sense
prioritization
metrics
trade-off judgment
execution planning

The situation

You are a PM on Stripe Billing. The Billing lead asks you for a recommendation on how Stripe should help subscription businesses reduce involuntary churn, customers who lapse because a recurring payment failed even though they did not mean to cancel. Stripe can see across millions of businesses and many payment outcomes, and internal analysis shows that payment failures account for about 25 percent of lapsed subscriptions on the platform. Some customers have built their own retry logic, but many use simple fixed schedules or do nothing because the problem is technically hard. Why now: subscription businesses are a major growth area for Stripe, and larger customers are asking for better revenue recovery with less engineering work on their side. The challenge is that the right next step after a failed payment depends on many factors, including the failure reason, payment method, geography, and business model. Assume you need to propose a product direction for the next two quarters that can work for both a small SaaS company and a large consumer subscription business. Your recommendation should balance recovery performance, customer control, implementation complexity, and the risk of letting unpaid users keep access for too long.

What to produce

Write a 1 to 2 page product strategy memo.

Your answer must

Define the user problem clearly, including which Stripe customers are affected most and why failed payments are a distinct churn problem.
Size the opportunity using the information given, and state the key assumptions that would matter most for prioritization.
Propose a product approach with MVP scope and explain how it should work for different failure scenarios or customer segments.
Explain the main trade-offs, including automation versus customer control, recovery rate versus unpaid access risk, and simple rules versus more advanced decisioning.
List success metrics, guardrail metrics, and a plan to validate the approach after launch.

Constraints

The solution must work within Stripe Billing for global subscription businesses and should deliver baseline value without requiring custom engineering by each customer.
Use only data and signals that Stripe can reasonably access from its own payments and billing systems.
Do not assume Stripe can materially increase fraud, dispute, or compliance risk in exchange for higher recovery.
The first version should be understandable enough that customers can trust and adopt it.

Format

Use short section headers and bullets. Make one clear recommendation, then justify it with trade-offs and metrics.

How Stripe actually played it

A quarter of lapsed subscriptions come from payment failures, called involuntary churn. Stripe explains how Smart Retries picks the best time to retry and reports that recovered subscriptions last about seven more months on average, with one customer recovering over 100 million pounds in a year. The case ties a feature to a clear revenue lever.

Size the problem first (25 percent of lapses are payment failures).
Recovered customers have real remaining lifetime value.
Combine retries with other recovery tools for compounding effect.

Built from How we built it: Smart Retries by Stripe.