12 benefits of recurring payments and how to accept them.

As the name implies, accepting recurring payments from your customers involves arranging for a set amount of money to be automatically withdrawn from their bank accounts or credit cards on a predetermined basis. This subscription model continues for a fixed duration of time, or indefinitely depending on what has initially been agreed upon between merchant and customer. 

As the statistics illustrate, the popularity of subscription and recurring payment services continues to be on the upswing—they are growing much faster than conventional retail sales.

Benefits for your business.

Until recently, offering recurring payments was restricted to specific types of businesses such as fitness and landscaping. However, the last few years have seen sweeping expansions to the payments universe, including the choices available to consumers for all types of products and services. With the emphasis on buying from home that came about at the start of the pandemic, the predictable contactless payments and convenient delivery that are hallmarks of subscriptions became even more desirable. Take a look at just some of the advantages that offering recurring payments can bring to your ecommerce and/or brick-and-mortar store.

• Enhanced income predictability. When customers sign up for the subscription model, both you and they know exactly when money will be withdrawn from their account and deposited into yours. The increased predictability means that you have a better handle on your cash flow, allowing you to make more intelligent business decisions. At the same time, late invoices are drastically reduced, and your customers can rest easy knowing they no longer need to set a reminder to make a payment.
• Add another attractive feature to your marketing and advertising campaigns. As the above statistics emphasize, customers love having the option to make recurring payments. Let them know that you are considering their preferences by publicizing your different payment options and you just might find that you edge ahead of your competition.
• Enhance your product choices. The subscription model opens the door for you to offer a wide array of product augmentations, step-ups, and accessories. Without difficulty, you can raise the appeal of your monthly snack box or pet supply packet. Give customers the ability to size up or augment their subscription with accessories and peripherals that raise their satisfaction level while simultaneously boosting your profits. All of this can be accomplished with very little effort on your part.
• Your patrons are likely to continue doing business with you if they can count on getting their products and services with no fuss. Once they have been set up, most subscription services simply continue without any problems, particularly if you have put mechanisms in place that monitor credit card expiration dates and notify you if a bank account has been closed. As long as customers remain happy with what you have to offer, they are more likely to opt to continue than to go through the process of canceling.
• Ongoing positive exposure to your business means that you will continue to remain at the top of your subscription customers’ minds—in a good way. In many cases, consumers will have a very positive view of your business, thinking of their monthly subscription deliveries as presents to themselves. Of course, you benefit from this as well.
• Recurring payments mean a drastic decrease in missed or late payments. As a result, you won’t need to spend nearly as much time chasing down delinquent bills or making those awkward phone calls notifying customers that they owe you money.
• Recurring payments are basically set-it-and-forget-it. If you aren’t sure how to initiate them, your payment services provider can give you tips that make the onboarding process fast and easy. Once you’ve worked out the details with your customer and securely stored them in your point of sale solution, the system virtually runs itself. That means fewer headaches for you, your staff, and your customers.
• When customers become subscribers, the automation that results means that there are fewer of the data entry errors that come from manual payments processing. Consequently, the accounts-related portion of your operation runs much more smoothly throughout the year and particularly when tax time rolls around.
• Automated payments can actually save you money. Smoother and more streamlined processes mean that less staff time is spent checking for and correcting errors, allowing you to optimize your budget and allocate tasks more efficiently.

Benefits for your customers.

In many respects, everyone wins when you offer recurring payments. Here are just a few of the ways your shoppers will see positive results:

• Today’s buyers are short on time and long on stress. They respond positively to any steps you take that make the buying and payment experience flow more smoothly without anxiety-inducing complications. The subscription model means that after a minimal setup process, shoppers can get what they want with virtually no effort or disruption, enabling them to get on with the many other tasks they must contend with in their daily lives. It’s a win-win for everyone involved!
• Speaking of the setup process, it provides an important structure that buyers can easily refer to at any time during their subscription. There are no mysteries in what they are purchasing, when their payments will be withdrawn, or from which account or credit card. As a result, buyers can budget accordingly, with no surprises.
• Minimizing errors is also important from the customer’s perspective. Your POS system’s secure software means that sensitive payment information only needs to be entered at the time of setup, minimizing entry errors and data safety concerns.

How to accept recurring payments.

Getting started with recurring payments is easy.

Start by contacting your payment processing provider. They can answer any questions you may have about the process in general or your software in particular. Merchant services companies such as Payanywhere also offer you the option to provide your clients with online invoicing. With this arrangement, you can regularly and automatically send a statement that indicates the amount that will be withdrawn and the estimated delivery date of the products being purchased. This service also enables shoppers to have an ongoing record of what they have bought. Best of all, initiating online invoices is simple. After inputting all of the parameters of the payment, your customer will regularly be emailed an invoice. Clicking on the provided link will take them to a secure portal where they can safely enter their payment details into. 

Recurring payments come in a variety of different options. As you determine which are best for you, ask yourself who your customers are and what products you want to feature. For instance, digital content might be best marketed to buyers on an as-needed basis to keep up with trends and announce new item launches. On the other hand, fashion offerings, snacks, or pet supplies might ideally be marketed on a predictable, once-per-month basis. You are the best judge of what arrangement best suits your company’s and your customer’s needs.

Embed This Infographic

Copy and paste the code below to get this infographic onto your website or blog.