Get in the loop with recurring credit card processing
WORLDPAY EDITORIAL TEAM
July 10, 2019
Recurring revenue represents a foundation of stability for many businesses. Most business budgets have fixed and variable costs. Relying on variable income alone makes planning extremely difficult. So it makes sense that businesses would look for income sources that are fixed, too.
Recurring revenue models have been the cornerstones of success for entire industries: from software to phone service, utilities to media subscriptions. Nearly all business types can grow with predictable recurring revenue models.
That historical success provided a model that’s becoming relevant to more businesses every day. Recurring billing can be a preferred means of paying for almost anything from prepackaged food deliveries to gym memberships, dog grooming services to personal grooming products.
The recurring payment model that is driving the explosive growth of subscriptions is made possible by recurring credit card processing services. Let’s take a closer look to see how your business can get in the loop with recurring payments.
What is a recurring payment?
A recurring payment is an agreement between a merchant and customer for ongoing regular payments in exchange for goods and services. Recurring payments have a few common qualities:
- Pre-determined payment method like a credit card or digital wallet
- A specified amount that is fixed for each payment
- Recurrence intervals can be set to weekly, monthly, annually etc.
Recurring payments offer convenience for consumers
Recurring payments offer a practical and convenient way for businesses and their customers to transact routine payments. Instead of entering same sensitive card information into a form for every payment, recurring billing makes the payment process automatic.
Recurring payments offer many benefits to customers:
- Set an automated billing schedule—no more late payments
- Tailor payments to your customers’ needs
- Schedule ongoing payments in just seconds
Recurring payments offer reliable revenue to businesses
Prompt and unfailing payments deliver a bounty of tangible benefits to merchants. Consider just a few of the possible benefits of recurring payments for businesses:
#1 – Predictable revenue generates vital cash flow. The success of planning for both everyday business expenses and growth for the future depends in large part on reducing unknowns, like cash flow. Recurring payments deliver predictable revenue that fuels the engines of business.
#2 – Recurring payments are a sign of loyalty. A recurring billing arrangement reflects a measure of loyalty between you and your customers as well as a means to further build—and monetize—those relationships. Recurring payments can quickly pay dividends in increased customer lifetime value and reduced costs of customer acquisition.
#3 – Recurring payments introduce efficiencies throughout your business. Predictable revenue means a greater ability to optimize inventories, properly manage staff and reduce the costs associated with managing payments manually.
How to find the right recurring credit card processing
Businesses looking to start on the road to recurring payment success have many options at their disposal. There are a wide variety of managed subscription services on the market today that offer recurring billing services, though one-step removed from the actual payment processor.
An important factor to consider when choosing the right recurring credit card processing service for your business is account updating. Processing one payment and having a credit or debit card on file doesn’t guarantee the relationship will last indefinitely. Your customer’s account information will change by natural causes like card expiration, as well as unnatural causes like fraud events that require updated credentials.
Choosing a recurring payment provider that offers an account updater service can help reduce the “leakage” that occurs when recurring charges are declined. Given all the benefits of your recurring payment relationship it’s critical that you not lose revenue because of what amounts to a clerical error.
at Worldpay today. We’ll take the time to learn about your business and tailor a recurring payments solution to help your business accelerate revenue while reducing costs.