When you sell online, you have to accept credit card payments, as many businesses use these to pay for goods and services. For some subscriptions business, you also need you also need payment processing providers to handle recurring billing so that credit card information is securely protected through each step of the process. Oceanpayment offers you a one stop payment solution when dealing with recurring credit card payments, in this article we will mainly talk about the definition of recurring card payments and explain how to set up recurring payments for your business as well.
What is Recurring Credit Card Payments?
Recurring credit card payment also referred to recurring card payment, is an authorization provided by the customer that permits the merchant to take payments from them by either debit or credit card. These payments will remain in force until the customer cancels the arrangement.
Recurring credit card payments can be set up online, in person or over the phone. To give a merchant a continuous payment authority on a card account, the customer provides their debit or credit card details, rather their bank details, which would normally be used to set up a Direct Debit.
Recurring credit card payments enables the merchant to take payments from a customer’s account on dates of their choosing, and for different amounts, without seeking further authorisation from them.
Recurring card payments are more likely to fail than Direct Debit payments, leading to revenue loss, as well as unhappy customers. Reasons include cancelled cards (cards are often lost or stolen), expired card details or customers hitting spending limits.
Payment failure rates vary, but for Recurring credit card payments they tend to be greater than 5%.
How to set up recurring credit card payments?
Here are some tips for you about how to set up recurring card payments：
1. Find a recurring billing solution
Even if you already have a credit card merchant account, you’ll still need an interface that manages your recurring credit card billing. For a low monthly cost, you’ll also be able to manage your customer database, run one-time transactions, invoice, and set up recurring billing schedules from one interface. These software providers can also help you set up a merchant account, if you don’t have one already.
2. Introduce the option to your customers
Most of your customers will be well versed on how to use recurring credit card billing on their end, but you will want to let them know that you now offer the popular payment option. Most will be happy to hear that you’re going out of your way to simplify their bill payment process and will be eager to sign up. We’ve created a set of email templates to help you launch electronic billing to your customers.
3. Collect payment information
You may already have credit card information for your customers if you’re processing one-time payments, but if you don’t, you’ll want to collect it for your recurring billing solution. Aside from the advantages of recurring billing, uploading your customers into the solution also gives you the power to manage their contact information, company information, and more.
4. Receive authorization
Receiving proper authorization from your customers is as important as collecting the payment information itself; plus, it gives your customers peace of mind that you’re ensuring you get the schedule they requested correct. Authorization for setting up recurring credit card billing can come in various forms (email, voice, etc.), and is important to always keep on file. Download our free payment authorization form templates here.
5. Set timing, frequency and amount Once you have your customer’s payment information and authorization in-hand, you’re ready to set up the recurring billing schedule.
Consumers have made it clear that they want recurring credit card billing as a payment option, and many businesses have answered. If you’re a business owner, contact us to learn more about how recurring credit card billing can help grow your business.