A recurring billing system is an online payment service that lets allows customers to set up recurring payments that are automatically debited from their credit or debit cards. Recurring billing is usually a feature offered by card payment gateways to help allow automatic billing. A recurring billing system is an ideal online payment solution for charges that occur on a regular installment basis such as membership and subscription fees.
A recurring billing system facilitate hassle-free payments for clients without the hassle of generating paper invoices or processing paper checks. A recurring billing system is almost like a paperless direct debit solution but this system can be applied to credit cards as well.
Once a client has registered for a recurring billing system then their monthly payments will be automatically charged to their credit card or the amount will be deducted from their debit card. A recurring billing system gives the customer the capacity to control their finances according to availability of funds.
The benefits of a recurring billing system are as follows:
Saves time – a client can set up the billing system and then forget it safe in the knowledge their payments will be made every month automatically. With this system there is no need to manually allocate funds which means a convenience lack of effort on the client’s part eliminating any hassle to them.
Saves money - By using this system means lesser cost compared to a manual billing system due to the absence of per-transaction fees.
Eliminate security risk – A recurring billing system is a secure method of online payment because there is no need to store sensitive information. This also benefits the seller as it means then don’t have to be PCI DSS compliance if they just use this system as part of their online payment gateway.
Retain more revenue – By being convenience for the client’s means they are more likely to use this payment method making sure you retain revenue. The system also helps eliminating late fees and make sure your get paid on time. Using this system also reduces billing failures because cash flow can be regularly monitored through email notifications.
Cost saving – The recurring billing system is a paperless process which can decrease invoicing costs by around 90%.
In essence a recurring billing system is the online equivalent of traditional standing order and direct debit. It enables clients to pay for goods or services online in instalments using their debit or credit card. So as you can see by the benefits using a recurring billing system can be a great online source of regular income for your company. If you are currently not using recurring billing and you take regular payments online then you should consider using this facility of a payment gateway.