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Learn How Recurring Payments Can Benefit You

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Offering recurring payments is a great way to increase customer retention, improve checkout experience and grow customer loyalty – and at the same time automate your payment processing and reduce operating costs.

Often, recurring billing is associated with debit orders or direct debits.  However, credit and debit card recurring billing provides the same monthly collection conveniences plus more such as real-time authorizations, faster funding and global sales reach.  Cardholders are also looking to pay with card for known benefits such as loyalty reward points, interest free payment terms, trusted brand (Visa / MasterCard) and ease of payment process.

Key Benefits for Merchants

  • Satisfy demand for payment card options
  • Increase enrollment in e-billing
  • Improve your cash flow and business forecasting
  • Reduce delinquencies
  • Improve collections
  • Build customer loyalty, retention and improve customer service
  • Flexible payment schedules – weekly, monthly or annually.

The Right Solutions for Your Industry

Many types of direct billing businesses can benefit from recurring payment solutions through the collections of fees and subscriptions.

Common industry verticals that utilize recurring are:

  • Membership and Subscriptions – Health clubs, security companies, magazines and publications
  • Insurance Services – Auto, home and other insurance services
  • Digital Services and Telecommunications – Wireless, broadband, mobile and fixed line telephony  providers
  • Online Services – Internet Service Providers (ISPs)  and digital gamers
  • Real Estate and Utility companies
  • Educational (schools) and Municipal Institutions
  • Medical and Health Service Providers

 

MasterCard Consumer Research Reveals Opportunity for Recurring Payments

According to a study released by MasterCard, 47% of credit card owners and more than half of debit card owners said they would consider adopting or using additional recurring payments by credit card or debit card, respectively.  With consumers wanting to benefits from card payments, businesses are expanding their payment options to include credit and debit cards to their customers.

Here are some quick points to consider when implementing recurring payments

1. Select a recurring billing solution

You will need an application or interface that helps you to manage clients and recurring card billing. This can normally either be done from a payment gateway or a subscription based software package. Payment Gateways like MyGate offer an online interface that allows merchants to manage their recurring clients. If you are using a software package, you will need to make sure that it works with a payment gateway as the card transaction still needs to be processed to the bank.

2. Introduce the recurring payment option to your customers

Your customers will understand what a recurring payment is so you won’t have to explain to them how it works but you will want to inform them that the payment will be recurring and to notify them of the set timing, frequency and amount.

3. Set timing, frequency and amount

In order to set up a recurring payment, you will need to include certain information such as:

  • Schedule start date
  • Billing frequency
  • Scheduled End Date
  • First payment amount
  • Subsequent payment amounts

4. Process payment information

In order to process a recurring payment, the card information is required to be captured.  To reduce your PCI compliancy requirements, it is highly recommended that you do not store card information in your environment.  Payment Gateway’s offer tokenization solutions that allow the card information to be replaced with a token so that for subsequent transactions only the token and value are required to be submitted.

Conclusion

Consumers have made it clear that they want recurring credit card billing as a payment option and many businesses have either implemented or begun the process to implement recurring payments. Our consultants, at Swift Merchant Services, have many years of experience in merchant services and can advise you on the best type of recurring merchant account based your business model and requirements.  If you’re a merchant, contact us to find out more about how to use recurring credit card billing for your business.

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Learn How Recurring Payments Can Benefit You

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