Recurring payments, which were only used for gym memberships and magazine subscriptions, are now being used in practically every business.
From subscription services like Kindle Direct and Ipsy to SaaS goods like Microsoft Office 365 and Concur and video streaming services like Netflix and Hulu, all businesses embrace recurring automatic payment systems to improve the customers’ checkout experience.
Subscriptions are beneficial because they are accessible for a wide range of products and services. Newspapers, fitness clubs, and sports season tickets are no longer the sole subscription businesses.
All of that has changed, though, and recurring payments are especially beneficial for businesses that sell items or services that people buy regularly. There are still numerous niches to fill, and it’s not only about food, beauty, or a gym membership.
Common Applications of Recurring Payments
Services and Products with Subscriptions
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Streaming services and subscription boxes are two of the most popular subscriptions. Today, subscription box businesses are exploding—everything you can think of is available at your fingertips. Furthermore, SaaS products that demand a fixed monthly fee, such as a WordPress membership, are becoming more popular.
Member Services
Gym memberships are the most frequent, but regular membership fees are also popular in social clubs and co-working spaces.
Government and Municipality Services
Utility bills, taxes, student loans, and other recurring payments are all convenient.
Retailers can also pursue a hybrid business model that combines one-time purchases and subscriptions.
How to Choose a Payment Company for Recurrent Payments?
The first step is to define your requirements. Consider whether establishing an in-house solution or finding a recurring payment processor is more realistic. While an in-house system would give you complete control, developing one could be time-consuming and costly. If all you need is recurring payments for your website, you’re better off using a payment system that caters specifically to your needs.
So, how can you determine which recurring payment system is ideal for your online business? Here are some tips:
- Confirm If Your Country Has a Recurring Payment System?
Payment gateways normally provide a list of countries they operate with; therefore, your business’s location is important. Most of the time, this is because of banking regulations. If your business is based in Europe, connecting with a European payment provider backed by European acquiring banks is usually a good idea.
However, just because you’re incorporated in the EU doesn’t imply you can’t sell internationally. Simply look for a payment gateway that allows you to accept payments in a variety of currencies.
- Check Out the Payment Scenario
Check to see if the recurring payment method you’re thinking about is adaptable. In this situation, what does it mean to be flexible? Many business owners define subscriptions as making the same charges to the same customers regularly for a certain length of time. However, you might consider offering a selection of plans or a hybrid plan to simplify things for your customers.
A little backend work is usually required, but recurring service providers are always willing to help out if needed.
You may create an unlimited number of plans to boost client retention when you choose a payment provider that allows customization so that you can offer a range of billing cycles with adjustable periods and numerous pricing levels.
- Determine The Safety of the Transactions
It’s crucial to remember that security concerns are just as important as the whole payment experience for your customers. Provide them with the most secure solution possible so they don’t have to worry about their data’s protection.
As a result, selecting a recurring payment processor that offers data encryption and securely keeps credit card information is critical.
- Assess The Degree of Transparency in The Pricing
When looking for the best payment processor for recurring payments, consider the different pricing structures. Many payment gateways do not charge any additional costs for recurring payments, and you are typically charged per transaction.
However, double-check it before signing a contract to ensure there aren’t any hidden costs (such as set up or monthly fees).
Recurring payment credit card costs vary by provider, but they often consist of a modest percentage of the transaction plus a per-transaction fee. Furthermore, if you perform a large number of transactions, you might try to cut costs by negotiating pricing with your recurring payment provider.
Final Words
All in all, recurring payments are becoming increasingly popular. And there is a logical reason for that. Subscription payments not only streamline the billing process but also provide your customers with an exceptional checkout experience. All you need to do is to select the most appropriate payment gateway for your business.