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Recurring Billing and Hosted Payments

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedMay 20222 min read

What convinces customers to sign up for recurring payments? Apart from the strength of your subscription products or services, they’ll also be swayed by security and convenience. If you offer recurring billing, you might want to consider using a hosted payment gateway.

What is a hosted payment gateway?

A hosted payment page or gateway is a third-party page where customers are redirected for payment. This payment page is fully secure, ensuring that customers feel safe entering their billing details. Depending on the payment gateway you choose, there is usually a variety of different payment options, from bank transfers to credit and debit cards. The customer can select the payment option of their choice before being directed back to your main merchant website.

How does a hosted payment page work?

Here’s how the process works, step by step:

Step 1: The customer is ready to make a purchase and clicks the “Checkout” or “Buy Now” button on your business website.
Step 2: The customer is instantly redirected from your business website to a separate, hosted payment page.
Step 3: The customer enters their payment details to complete the transaction, after which point they are redirected back to the main website for confirmation and shipping information.

Using hosted payments means that the customer’s payment details never pass through your website. You are not responsible for collecting, transmitting, or storing this information – instead, the sensitive financial details are handled by a hosted gateway like PayPal.

A host to host payment process is another option to consider, but this works a bit differently and is more applicable to high-volume online banking. It’s a two-way data transfer between a business and bank.

What are the benefits of hosted payments?

So, how can a hosted payment solution help with recurring billing? Here are a few of the benefits to consider.

It streamlines the process by storing payment details for future use so that the customer doesn’t have to input them every time.
Using a hosted payment solution offers a high level of security for both business and customer.
Most hosted gateways offer a wide selection of integrations, allowing you to customize the service you offer to your customers. You can integrate the gateway into your website for frictionless payments.
The best payment gateways offer a full selection of payment methods, catering for customer preferences. These might include direct bank transfers as well as digital wallets like Google Pay and Apple Pay.
You can offer a streamlined checkout process without multiple lengthy steps. The customer is simply redirected to a single hosted payment page for faster processing and approval.

How to choose a hosted payment solution

Of course, not all hosted payment solutions offer the same features. If you’re thinking of integrating this type of billing system, you’ll need to be sure that it supports recurring payments. Look for features such as the following:

Automated customer communication – Does the system automatically issue receipts and send notifications for upcoming payments? Will it flag expiring credit cards and ask for an alternative payment method?
Intelligent payment retries – The best hosted payments solutions will ward off failed payments with an intelligent retries system like GoCardless Success+ feature. This cuts involuntary churn rate significantly.
PCI DSS compliance – Security is a key issue for any online customers, particularly those who sign up for recurring payments. A customer won’t want to authorize ongoing subscription payments if they don’t trust your payment page. PCI DSS compliance is essential when handling cardholder data, and a hosted solution takes care of this on your behalf.

Ultimately, using a hosted payment solution takes all the hard work out of handling financial data and provides a secure, streamlined payment experience for your customers.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.