What are recurring payments?
Recurring payments are automatic payments deducted from a credit card or bank account on an agreed schedule (e.g. daily, weekly, monthly). Recurring payments are useful for a wide range of payments – such as subscriptions for magazines, membership clubs and utilities bills.
What are the advantages for merchants?
- Decreases late or missed payments: As recurring billing happens automatically, there is a reduced risk of delayed or missed payments. Furthermore, budgeting is made much easier as payments are expected at regular intervals for customers.
- Improve customer relationships: By signing customers up to subscription arrangements, business are able to reduce the risk of churn and build stronger, sustainable customer relationships over time.
- Saves time and money: Business owners no longer need to manually manage all billing cycles. This frees up time so they can focus on their core business.
What are the advantages for customers?
- Saves time and effort: By setting up automatic payments, customers no longer have to manually input payments for their subscriptions.
- No more late fees: Previously, if a customer forgot to input a payment manually, they could potentially be hit with a late fee. The automatic nature of recurring payments means that such scenarios will no longer happen, saving money and effort for the consumer.
- Keeps information secure: Recurring billing allows customer information to be managed securely. The lack of paper bills means that the risk of duplicating and circulating sensitive information is minimised, as is the risk of employee error.
- Environmentally friendly: Each year, more than 3.6 million tons of greenhouse gas emissions are created by transporting paper bills alone. There is no longer a need for physical bills to be sent out as almost everything can be done online in this day and age.
- Leverage the growing demand for subscription services: Research has shown that there is an increased demand for the convenience and ease of subscription services, especially within younger generations. As of 2017, 70% of millennials have a subscription to a product and 89% have a subscription to a service. As a business, offering recurring payments can greatly improve customer experience, and help differentiate your business from others.
How can Paydock help?
Paydock is a smart payments platform that allows merchants to connect to various payment gateways such as Stripe, Braintree, Paypal and more. We offer a recurring payments engine that overlays on top regardless of payment type, gateway, or frequency. Our clients are able to automate flexible customer subscriptions, increase revenue and reduce time spent with managing customer billing.