For businesses using it, recurring billing is a win-win situation for them and their clients. After all, you’re giving the customer a good experience while making sure that you’re getting paid consistently through a pre-arranged schedule.
Any product or service that a customer subscribes to with weekly, monthly or annual payments requires recurring billing. This means that you can charge the customer’s bank account on the agreed schedule without the need for permission.
Caveat: Remember that recurring billing business are considered high risk, which means your company will require a high risk merchant account.
Offering this type of billing option means that you’ll need a good merchant account that will allow you to:
- Offer different payment plans for customers. Whether you’re a membership or subscription service, a merchant account will help you create different payment plans for customers to choose from without making your own system confusing to track and maintain.
For instance, you could offer weekly, monthly or annual payment plans at different rates without putting you or your customers through any hassle.
- Set customizable time frames for payments. Flexibility is key when offering recurring billing for your product or service. With a merchant account, you’ll have the option to set a time frame for each account depending on the type of subscription that’s chosen by the customer. It also gives you the flexibility to let the customer cancel his subscription any time.
- Create different payment amounts. To attract new subscriptions or memberships, you can set a discounted rate for initial payments and still follow your regular rate for subsequent billings.
You can also give out trial periods that are either free or at a lower rate, or special rates for referrals and long-term subscriptions. Other businesses also give discounted rates for larger down payments followed by smaller amounts for recurring payments.
- Set up automatic re-billing. With a good merchant account, you can set for transactions to be re-processed if the payment didn’t go through the first time. This helps you save time and resources in going over recurring payments and ensures that you keep your cash flow consistent.
You just need to be extra careful with this option to avoid double charging your client. And if your provider accidentally does double charge, make sure to process payment reversals right way to avoid a chargeback complaint.
- Manage your finances conveniently. Recurring payment transactions can be very difficult to manage if you’re doing everything manually. But with the right merchant account, you can easily keep track of all your payment transactions through robust reporting features. These give you all the information you need to calculate your revenues or determine your losses.
It’s also easier to gather documents in case someone files a chargeback against you since you already have these reports on hand.
Whether you’re a membership or subscription-based business, having the right merchant provider can really make a huge difference to your operations.
Aside from making sure that you keep your income flowing, you also get to protect your business credibility by having a payment processing option that’s secure and safe for both you and your customers.