Accepting regular payments should not be a headache. To get the best possible results, you should partner with a reliable payment technology provider. It’ll help simplify the checkout experience for your clients and boost your revenue. Are you interested in such results? Find out everything about recurring payments, their benefits, setup, etc.
Definition
Recurring payments are the kind of transactions that happen automatically and regularly on a specified date. Payments can be set up to be monthly, bi-monthly, quarterly, biannual, or annual. To introduce such a payment option, you must realize that it consists of two main blocks:
- Billing logic;
- Payment processing.
The first one relies on the correct price calculation. So, take your time and hire experts who can help you account for all possible factors.
The other block is payment processing. This is the actual money transfer. Your client agrees to the terms of the deal and makes the first payment to the seller’s account.
Setting up recurring payments: Is it really so complicated?
When you hear that only a payment processor is enough to accept recurring payments, you hear right. However, it requires a self-build billing engine. It demands huge investments, and it’s quite difficult to hire real professionals to create it for your business. This is a possible solution but the most complicated one.
Alternatively, you’ll require at least a basic billing engine from widespread payment gateways. This choice, on the other hand, can limit the selection of services you’ll be able to offer. As your company/website/service popularity grows, such an approach is likely to fail. It’s not sophisticated enough to handle offers and operations like:
- free trials;
- extensions;
- discounts;
- upgrading customer plans;
- retrying failed payments, etc.
Yet, they are essential for your success and business growth.
To succeed and take your business on a whole new level, you should get recurring billing systems that can operate on top of the payment gateway. One simple integration will introduce everything you need at once. In this case, it’s better to think about the features you wish to use first. You can acquire all the tools you need to offer a superb customer experience and accept regular payments.
A step-by-step guide on integrating recurring payments
- Choose a suitable payment gateway. It depends a lot on whether you have a regional business or an international one because the processor must be able to accept foreign currencies in case of the international business;
- Select the best-suited recurring billing software that meets all your demands. At the very least, it should have invoices, account integration, checkout, customer self-service portal, team dashboard, transactional emails, PCI compliance, and developer-friendly APIs;
- Customize all the tools;
- Test the system and pricing plans in the sandbox to eliminate all possible issues;
- Set up email templates so that your clients get notifications and a clear understanding of the services they will receive as well as the steps they need to take.
What are the benefits of introducing recurring payments to your business?
Business owners who are interested in getting more routine revenue should start using recurring payments. This approach secures the following benefits:
- You will attract more clients by offering flexible payments. It’ll take the customer experience to a new level and increases client loyalty;
- Automation of the process saves time and money. The software securely stores all the data and replaces all those sheets of paper you have on your desk;
- You’ll be able to offer customized services to more people while spending the same period of time;
- Properly setting up recurring payments reduces involuntary churn caused by missed payments or declined cards;
- Customers still have numerous payment options to choose from.
Which industries take advantage of recurring payments?
If you look back in time, you see that only a few industries used this billing type. Mostly newspapers and DVD rentals. Nowadays, however, your imagination is the only limit. The rise of recurring payment popularity has brought people tons of subscription services. Some of them have become essentials like being replenished with soap, pet food, and everyday items we often buy. There is no need to remember to purchase shampoo or shaving cream, because you know that the parcel will be waiting on your doorstep every month/two months/ etc.
However, there are other subscription services now. Fashion boxes, membership websites, streaming platforms, gym memberships, etc. We already can’t imagine our lives without Spotify, Netflix, and other services.
As you might have noticed by now, you are able to sell anything with this payment method. The question is how to pick the most suitable solution for your particular company. Well, to give you some ideas, answer the following questions:
- Do you plan to offer one-time charges /recurring payments within one plan?
- Will you have flat-rate charges, multiple prices, or usage-based prices?
- Do you offer a trial period for clients to test your services for free?
- Will you send customized emails about every transaction?
- Will you offer customers an opportunity to manage their subscriptions via their accounts?
- Do you plan to sell goods or services around the world?
The list can go on almost indefinitely. As you honestly answer these questions to yourself, you begin to realise what it is you want. It’s the key to getting the most suitable recurring billing solutions on the market.
Another thing you should take into account when making a choice is the pricing policy. Verify you get the best value and excellent-quality tools. If you wish to globalize your company, verify the system can account for different currencies, taxes, and other issues.
Bottom line
Recurring payments allow merchants to collect more revenue and optimize their operations with one simple integration. It’s a smart approach to automating one’s business and increasing the clients’ loyalty. However, it’s not always as easy as it seems at first sight. Such a payment model requires attention to detail, numerous tools & features, perfect synchronization, and smooth automatic charges. You can get all of it only by choosing a reliable, trustworthy, and experienced service provider.
