Recurring Payments: How to Integrate Them and Get More Revenue
In the modern ecosystem, customers have understood the benefits of paying to access a product rather than owning it outright. The subscription and recurring revenue model have taken over the one-time sales model with more companies providing recurring payment services. If you’re new to this developing payment system, this article will provide you with an overview of the payment model, and how you can integrate it into your system, and make profits.
What is the Recurring Payment Model?
In a recurring payment business model, the vendor provides access to their services or products for a recurring fee charged at regular intervals. Once popular for magazine or newspaper subscriptions and gym memberships, recurring payments are becoming common for other industries as well.
Recurring payments are automatic payments that appear once a customer authorises the merchant to charge for a product or service on a predefined schedule. If done correctly, recurring payments can save a lot of time for the business and help in retaining customers. With recurring payments, merchants wouldn’t need to raise payment requests every time. With the consent of the customer to charge their card, the payments can be done automatically on an ongoing basis.
How to Start Accepting Recurring Payments?
To adopt the recurring payment model, you’ll need two blocks: billing logic and payment processing. Billing logic calculates the price for the product taking into account several factors while the payment processing block executes the actual transaction by charging the customer’s card.
If you have a billing engine in place then you can start accepting recurring payments with the help of a payment processor. Being an all-in-one payment solution, payment gateways are suitable for this payment method. They can automate the recurring billing system and help you scale your subscription business.
In addition to selecting a payment gateway, you need to decide which method to offer customers. It’ll depend largely on your customer base and how they like to make payments. Once the payment aspect is cleared, it’s time to decide on the billing software. Good recurring billing software can easily integrate with your payment processor, support one-time payments, and make the whole process agile and hassle-free for your customers.
How to Integrate Recurring Payments?
- The first step is to select the appropriate payment gateway that you want to integrate. Choosing the payment gateway depends on several different factors relating to your business. Select a payment gateway that supports international payments and can accept foreign currencies.
- Select a recurring billing software that can generate invoices, perform checkout, integrate accounts, team dashboard, PCI compliance, transactional emails, and more.
- After integration, customise the tools to match your business.
- Perform testing to make sure that the integration works fine.
- Set up a notification and reminder system that notifies your customers about upcoming payments and has a clear understanding of how the recurring payments work.
Benefits of the Recurring Payments Model
Traditional businesses are subject to market fluctuations. With recurring payments, organisations always have a steady source of revenue at regular intervals. This helps businesses to plan their expenses, stock inventory, spend on marketing, and create growth strategies.
Attract More Customers
The premise of paying less money across intervals instead of paying too much at once has enticed customers for a long time. By dividing the payment options into smaller chunks, you can attract more customers and reduce their price barrier. Subscriptions and EMIs are a great way to offer products and make them more accessible to customers. So while the monthly payment might not impact them much, they can end up giving you more money over the entire term.
Repeat customers make up a huge chunk of the market for businesses. Pitching your product to new customers every time for just one sale isn’t that economical. Selling those same products to existing customers, however, isn’t that difficult as they are already familiar with your products and don’t have to go through the entire process again. In fact, retaining customers has been found to be five times cheaper than acquiring new ones.
Speeds Up Transactions
Once it is set up, billing gets automated and requires little to no maintenance. There’s no need to start a new payment, every month. Once a date is defined by the customer and a payment method is selected, money transfer happens automatically.
The recurring payment system is becoming popular among customers as well as business owners. They provide a certain freedom to both the stakeholders and ensure that there is no disconnect in the service as long as timely payments are made. Integrating a recurring payment gateway like PayTabs will allow you to set up scheduled payments with your customers and maintain a steady stream of income every month. It supports multiple payment methods so that your customer can pay for your goods or services however they like.