2020 is the official decade of the digital age. With modern digitalization, many businesses have upped their marketing game and have seen a significant growth spurt and turnover in their businesses.
From hospitals to fashion industries, everybody and everything has gone digital, that means that everyone has found ways to digitize their business and simultaneously made sure to see a substantial increase in the growth market.
For instance, multiple industries have now opted for subscription platforms to manage all their payments. This not only cuts down on manual labour but also decreases chances of any payment loss and customer churn (the percentage of customers that stopped using your company’s product or service during a certain time frame) for the company. On the other hand, this also simplifies the payment process for customers. With recurring payments software, they don’t actively need to check their invoices every billing week or month and the customer is continuously charged for the services until they close or pause the services.
What exactly are Recurring Payments?
In the simplest terms, recurring payments (also known as subscription payments) take place when customers authorize a merchant to charge them repeatedly for goods or services on a prearranged schedule (monthly, weekly, daily or annually).
With recurring payments, you do not need to chase, email or constantly phone your clients for any payment information. You only need to get your customer’s permission/consent one time to charge their cards and then the payment will be charged according to the schedule until the customer closes/cancels their subscription or the payment plan expires.
All of this is done digitally so neither the customer nor the vendor needs to be present physically or virtually.
The best way to process recurring billing is to get yourself a subscription management software. These platforms manage all of your e-billings: from charging your client, sending invoices, to collecting payments and even processing refunds. These systems have high security measures so that the the collection and deposition of recurring payments can occur seamlessly.
Here are the main steps involved in recurring payment processing:
- Customer visits the merchant’s website and selects recurring payment process.
- Customer accepts the terms and conditions of the contract and select the recurring payment plan they desire. The customer is asked to agree to the payment plan structures, payment processes as well as any external fees that may be added to the charge.
- Customer needs to add their payment information and consent to the payment method by saving this information.
- Before the payment can be processed, the payment processor needs to contact the acquiring bank, the issuing bank and the credit card company. With approval from all three, the payment is then added to the vendor’s account.
- As soon as the payment is processed, the customer receives a notification/email to inform them of the transaction that has occurred. With each billing cycle, this process is repeated. Some companies even send notifications before the transaction to their customers.
Benefits of Recurring Payments to Your Business
Recurring payments have simplified the billing process not only for vendors but for customers as well. It also portrays a very strong customer-vendor relationship which is important for any business’ growth.
This has simplified the tedious task of opening your account, entering your billing information every month to renew your subscription plan for a certain service or to continue using the services. It has cancelled out the inconvenience factor for the customers.
This payment process is automated and hassle-free.
For merchants/vendors, recurring payments provide various benefits including:
- You only need to spend the cost on acquiring the customer, after that no reminders, emails or manual labour is required to charge the customer. All you need to make sure is that the customer continues using your services.
- Once a payment cycle has been set and the billing schedule selected, everything from there onwards is automated.
- Who wouldn’t want to save their time and energy from tedious everyday tasks? Recurring payments does exactly that. For instance, PayPal recurring payments happen in the same seamless, hassle free way that every other recurring payment does. The big upside of all this? Revenue Increase!
- Such payment processes heavily rely on online payment gateways. These gateways are connected to different servers with a fool proof method of avoiding digital fraud. They have fraud detection and prevention technologies that not only makes sure your payment is secure but also builds a trustworthy reputation and name of the business.
Recurring Payment system at Subscriptionflow is a sure and hassle-free way of digitizing your billing. It only adds value to the business. With easy carved steps, any customer can now take up this payment process. It will also strengthen the relationship between a business and its customer. So, what’s stopping you from hopping onto this exciting wagon?!