Last editedAug 20222 min read
Recurring payments are a convenient option for consumers and businesses alike. The seller gets a guaranteed payment at regular intervals, while the customer can create a subscription and allow further payments to be taken automatically from their account. In this post we’ll discuss the benefits of recurring payments and how recurring payment software can help to streamline the process.
What is recurring payment?
Recurring payments, or subscription payments, are automatically initiated according to a specific schedule that’s been agreed by a seller and buyer. Customers need to give their explicit permission for a business to take specified payment amounts from their bank account on an ongoing basis. They provide the merchant with their billing details, along with their consent, and the merchant then charges them the agreed amount.
How do recurring payments work?
Banks used to be the only institutions that could offer recurring payments, requiring the account holder to set payments up manually. Nowadays, subscription payments are available via a number of payment service providers.
Benefits of recurring payments
Saves time: Customers no longer have to log into their bank or enter their account details every time they need to make a payment.
Guarantees payments are made on time: With recurring payments, companies no longer need to worry about getting paid on time. Since the payments are automatic, they no longer need to send out reminders when a payment is overdue.
Boosts customer loyalty: With a subscription model, businesses can form closer relationships with their customers.
Predicts cash flow: Once recurring payments are set up, companies are better able to predict cash flow, which helps with business strategy.
Trackable payments: Both customers and businesses can keep track of all their payments in one place. By using a payment processing tool, all processes can be automated.
Reduced debt collection: With recurring billing, staff no longer need to chase after missed payments, freeing up their time to concentrate on other elements of the business.
How to collect recurring payments?
It’s easy to start accepting recurring payments when you collaborate with a payment processing service that supports this process. Choose a payment provider that uses recurring payment software. You can then provide customers with the option of selecting a specific payment schedule and fee, and allow them to use their chosen method of payment.
Your payment processing provider will save your customers’ payment details and keep them secure, charging them automatically when their agreed payment day arrives.
GoCardless is a payment processing provider that makes it simple to set up and collect recurring payments. To start accepting Direct Debit payments on your website, you can use a customised payment page, or integrate the software with your own existing checkout, via an API. Customers need only enter their details once, which takes around two minutes, and they’re then alerted via email when their payments are due to be taken, whether it’s for an ongoing subscription or a one-off payment.
Finding the best recurring payment system
When you’re looking for a payment provider, look for one that allows you to scale and accept payments in multiple currencies. You should also look for a partner that can accept various payment methods, and make sure your provider follows all payment security best practices.
A subscription-based model can provide a good foundation for a business, in terms of providing them with a stable and continuous cash flow and creating strong relationships with customers. By automating your recurring payments you can maximise revenues and reduce risk.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.