Everybody is probably making a few automatic payments through time, some of you each month. Just think about your monthly Netflix subscription payments or a gym membership. Yes, these are the real examples of recurring payments.
In today’s world, the subscription model continues to grow in popularity. Due to the steady cash flow and other advantages of recurring payments, many businesses are now using the subscription model. Let’s dig together into everything you need to know about using (automated) recurring payments to transform your business, stabilize your cash flow, and, most important – keep your customers happy.
What is recurring payment?
Recurring payment happens when a business automatically charges a customer on a set schedule (weekly, monthly, annually, or custom intervals) for the goods or services they purchase. Once the customers give their permission, these automatic payments usually charge to a customer’s credit card or debit card through payment gateways or are deducted from their bank account through an ACH transfer for countries located in The States or SEPA for countries inside the EU.
Which businesses are using the recurring payments?
Many different businesses use recurring payment plans – from Telecom businesses that provide usage-based (metered) billing to newspaper and magazines subscriptions and gym memberships. Also, don’t forget on SaaS applications like Google, Dropbox, Netflix. Let’s agree that a variety of industries and businesses can use recurring billings.
How do recurring payments benefit consumers?
Consumers enjoy the ease of auto-pay that automatically deducts the pre-arranged subscription fee for any business services. Here, customers don’t have to worry about payments, so they’re free to focus on the experiences and value of the service that you offer. Other recurring payments benefits for customers could include:
- automated receipts sent to text or email,
- ability to quickly update payment method and subscriptions levels,
- flexible payment methods.
What are the benefits of using recurring payments?
Recurring payments offer some compelling benefits that can boost your business:
Reduce late or missed payment
Late payments are detrimental to companies, as they affect your revenue and relationships with your customers. However, you can set up the system once with recurring payments and ensure that collection is automatically repeated based on a predetermined schedule. Your business will spend less time thinking about when late payments are going to be paid.
People are usually in a hurry, that’s why we want easy things to use. With the automated processes, we could make our lives easier. Automated recurring payments cut down the cost and effort. All you need to do is establish the original payment plan once, and then the software handles payment processing for you.
Improve customer relationship
Recurring payments are helpful for customers because they need to enter their payment information just once. Easy process that takes funds from customers’ bank accounts right on the appropriate billing dates. Customers don’t need to set any reminders to pay subscriptions or go to the bank and make payments.
Defend against fraud
Some fraud detections and prevention technologies defend the funds against fraudulent motives, reinforce a trustworthy image of the business among customers, and save the resources otherwise spent on finding and resolving fraudulent transactions.
How does Tridens deal with these kinds of payments?
Imagine your business needs a billing solution, and subscriptions are one of the most significant economic models for you. Now using a recurring payment software would mean that your clients’ subscriptions and your revenue are managed automatically by storing payment data and processing charges regularly without you having to go through the billing manually.
Tridens wants to ensure that clients can serve their customers most efficiently. We do not store sensitive data, only references to data from a payment provider such as Stripe, Authorize.net, Braintree and many more. Each customer can have multiple billing profiles with different payment types:
Numerous billing profiles allow our clients to utilize different payment types at once. Tridens Monetization can also safely store payment method tokens from various payment providers. Storing payment tokens allows the customers of our clients to keep a list of payment methods for reusing. In the same way, a payment collection job can be scheduled, which finds due invoices and tries automatically collect payments with the customers’ default payment methods.
In conclusion, recurring payments are gaining acceptance worldwide. The thing is, it has a benefit for both sides: businesses and customers. On the one hand, companies get their payments on time and cut down on administrative costs associated with payment delays. On the other hand, customers don’t need to go to the bank and pay their invoices every billing cycle.
Grow your subscription business with our simple to use payment solution. Create payment forms and buttons that will automatically charge your customers weekly, monthly, or yearly. Our specialists would be happy to help you.