Why Your Business Should Take Recurring Credit Card Payments
Written by: Lyle Knox
If you are providing a service or a product that is used on a recurring basis, recurring credit card payments will make running your business a lot easier. Recurring credit and debit card payments let you automatically bill your customers on a regular interval. That interval is something that you can decide, either with a specific date or on an interval based on elapsed time, such as every two weeks.
Making an automatic payment for services has become a very common way for customers to pay their bills. Vehicle insurance, web hosting or internet access, cable TV access, and many other monthly billed services utilize recurring credit card payments. Recurring bill has become a more common way for people to pay for utility or maintenance bills. If you provide a service or product on a specific interval, offering your customers this convenience will be a welcome option. Your customers will not have to worry about whether they miss a payment or find the time to work on bills.
Recurring credit card payments is a feature that most credit card aggregators and third-party processors provide. While most merchant account providers offer these services specifically, it is highly likely that you will need a merchant account for a third-party processor’s service. Most of these features also provide electronic invoicing and receipting options.
Most providers of recurring credit card payments also provide automatic electronic receipts. The customer receives notice that the charge was successful. Electronic invoicing will also send an electronic receipt, but it will not provide notice of a pending charge. If a payment was not successful, you can set the option of automatically resubmitting the charge or not, but the customer will receive a notice of the failure each time.
Whether to send an electronic invoice prior to a charge or not is largely dependent on the nature of your business and how you want your business to operate. If your company provides a service where the charge amount never changes, such as a gym membership or internet connectivity, then sending an electronic invoice may not be necessary. If your business provides services that fluctuate from month to month, sending an electronic invoice may be useful to your customer so they are aware of what will be charged to their account and to check the invoice for accuracy. A customer would rather dispute an invoice rather than a charge.
One of the major benefits of recurring credit card payments is regular receivables. Knowing that your customer base will all be paying approximately around the same time will provide you the ability to plan for paying your bills as a business. It will also save you time and effort by having invoicing, receiving, receipting, and settlement all automated.
Once you have assessed your business operations and determined what would be best for your business, and most convenient for your customers, you will be able to research the best options for establishing recurring credit card payments for your business. There are a lot of advantages, features, and fee scales to consider with aggregators and processors, but with good research, you will find one that suits your needs best.