When it comes to selecting the right payment option for you, there may be a lot of choices. You need to choose the best that suits your needs and requirements. It requires a lot of care and focuses when you are selecting a payment option. There is as much that may lead you to get wrong. In this article, I shall provide an insight into recurring payments. There is a lot of do, s, and don, ts that you need to look for. It is a fact due to e-commerce development and different payment options, and you have a lot of facilities. But you must be careful as a customer to follow the right payment option. Recurring payments are the brainchild of the modern online store from where you regularly shop and hire services.
What is Recurring Payment?
What are recurring payments, and what is recurring payment meaning? This question has importance for you if you are a new e-commerce business owner or a customer who is opting for online payment to e-commerce stores. We may call recurring payments as Auto pay also. In recurring payments, you allow permission to your retailer or merchant to deduct payment for service each month from your bank account or your credit card. You may allow him to charge automatically from your credit card the required amount each month without seeking permission every time. In this payment method, the merchant gets your consent one time upfront. He charges the money automatically to avoid late fees. It continues until the consumer takes back this permission.
There are some benefits of recurring payments for consumers and merchants. You have no concern about late fees and going to the store to pay the charges. You need not have to give permission every time, so it saves your time and resources. The merchant need not bother about the payment of bills, and he may process any time. There are some drawbacks. Also—you have given access to your account that may create problems.
What do you need to do?
When you are shopping for a recurring payment platform, your due diligence is required. You need to subscribe to a payment processor that complies with the payment card industry standards s that you have safety. Always opt for a branded and reputable subscription provider to avoid scams. You need to care about fraud protection that is an essential feature of today’s cybercriminal attacks.
You need to make sure that the payment processor you select comes up to your custom needs and requirements. You may need flexibility for processing payments in international currency and offers different currency options. The payment processor must be able to process the money that you need.
Consider costs and expenses
You should look for a recurring payment system that helps you reduce the bill collection charges. It should not only bring monthly bill collection to your account, but also you need not spend money on bill collection staff. You need not hire additional bill collectors a need not to go after delinquent accounts. Without recurring payments, you may have t go after defaulters that may lower your yields on transactions.
If we take the example of the health sector, the recurring payment system brings faster resolution of your balances than traditional payment systems. You will see that most of the health care institutions, insurers, and medical facilities now facilitate you to make recurring payments for services they provide you. Health insurers prefer recurring payments for a premium during the year.
Versatile recurring payment options
You should search for a recurring payment subscription service that can accept h payments via other methods as the customers prefer to pay. It should take all major credit cards and must be related to all banks to handle the automatic payment.
Forget churn rates
The churn rate may be the rate at which your customers unsubscribe for recurring payments. The customer may stop the subscriptions. For success, your business growth rate with new customers should exceed the churn rates. So that you’re new customers are more than the customers leaving you. Churn rate varies from industry to industry. The churn rate has a lot of factors. The churn rates are an essential factor for industries where recurring payments are the top source of revenues. We may take the example of the telecommunication industry where churn rate plays a vital role in profit margins. The telecommunication industry includes cable, satellite, and other communication methods. Their churn rate is a crucial determining factor for stacking up against other companies in this competitive market that is undergoing growth.
You should go for a payment service that may help you in understanding the churn rate and offers you ways to manage it.
Don’t go for colossal commitment
You should not opt for a payment system that requires a substantial integration commitment or asks you for considerable expenses to pay. we make it simple with our tokenization so simply add your customer info once and get paid.
Expired credit card
When you use recurring payment for installments or subscription based for service/product you may have experienced that your customer credit card being expired and you must consistently watch all transactions and contact your customers to update their information.
We actually have a good news for you on our online payment gateway and virtual terminal We Automatically updating credit card details after expiry and we update the tokenization , so you are not neither miss a payment nor contacting customers for new credit card information.
Don’t ignore reports
You should get insight into the description of transactions and your churn rate, it is essential for you. You recurring service providers should send you reports about the recurring billing status and how it is helping you in business growth.
Effects of recurring payments on your customers
You should never ignore the consequences of your recurring payments on your customer retention. Most of the customers set the recurring payments and forget the impacts of recurring bills on their accounts. They are interested in the features that the deductions commensurate with the monthly bill.The amount is always deducted on the same date as it was due. They usually do not remember your invoices and use auto pay options to avoid late fees. They want to keep their finances secure with recurring payments with the satisfaction that their bills are automatically paid each month. They will continue with it if there comes no complication and extra costs.