Why Do Companies That Do Recurring Billing Need Merchant Accounts?

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:

For instance, you could offer weekly, monthly or annual payment plans at different rates without putting you or your customers through any hassle.

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.

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.

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.

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