Accepting recurring payments is an effective way for your business to improve its cash flow. Why? Well, it’s essentially recurring revenue, which makes it much easier to predict future revenue.
But how do you manage recurring payments to make the most out of them?
What are recurring payments?
Before we get into it, let’s start with the basics. What do we mean by recurring payments? Rather than a one-off transaction, a customer can make a repeated payment for a product or a service such as a subscription, like Netflix. The customer will grant permission for the funds to be taken on a predetermined schedule, whether that’s weekly, bi-weekly, monthly, etc. until the contract comes to an end, or the permission is revoked.
Our tips to manage recurring payments
Unfortunately, simply accepting recurring payments isn’t enough. Customer loyalty can be hard to come by; 32% of customers will cancel their service if they receive a single bad experience. That’s a high percentage that won’t give you a second chance!
So, being able to manage recurring payments properly is crucial to a business’s success.
Here are our top tips on how to manage recurring payments:
Who doesn’t like an automated process? Recurring payments don’t just have to be automated for the customers but can be for the merchant too. With the right platform, you won’t need to manually take the payments every time. As soon as they are set up, the funds will automatically be taken on the agreed date, saving your business time and resource. Not only that, but it will also improve accuracy, reducing the amount of data-input errors.
And since they are automated for the customers, those funds should keep on coming like clockwork.
There will be times when payments fail; it’s completely normal and nothing to worry about as long as you have the right tools in place to reconcile them. They can fail due to a number of reasons, but most commonly it will be down to expired card details or not enough funds in the customer’s account.
You can easily rectify these with a few smart tools, like multi-card registration, account updater and auto-rebiller.
Find out more about these tools from our recurring payments page and see how we can help you get those payments paid.
Optimum billing times
There are certain times that are more suitable for consumers to make payments, and everyone is different. This is where your data will come into play. Based on failure and success rates, Total Control can utilise this information to work out optimum billing times to increase your chances of a successful payment first time.
Get your data
Knowledge is power in most instances, certainly when it comes to collecting payments. We’ve already covered how it can influence optimum billing times, but it can also help you keep track of payment statuses, learn from customer behaviour and trends and build business strategies for the future.
Want to beat churn? The dreaded word for all merchants. The best way to handle recurring payments so that your customers stay loyal is to give them control. Offer flexible schedules with the ability to take payment breaks and make alternative payment methods available so they can pay with their preferred method.
Making your product or service easily slot into your customers’ lives, rather than being a burden, is a sure way to guarantee customer satisfaction.
Communication is key
Last, but certainly not least, is communication. If you want to avoid a chargeback, you’ll want to keep your business at the forefront of your customers’ minds. We’re not talking about marketing communications, we’re talking about being upfront about your billing policies so that they know what they are signing up for. Clear communication builds trust and reduces disputes.
This includes any issues that occur, payment reminders and how the transaction will appear on their bank statement. It’s not always super clear with your brand name in the description. As long as the customer is aware of how it will appear, they will recognise the transaction and know that it’s you.
The importance of managing recurring payments
As a merchant, recurring payments can be an absolute game-changer! There are many perks when managed correctly, making it a priority to get it right.
So here are the main reasons why it’s so important to manage recurring payments:
- Steady cash flow – No more waiting anxiously for customers to remember to make their payments. With automated billing, you can confidently count on a regular stream of income, making it easier to plan and invest in the growth of your business.
- Saves time and resource – Gone are the days of manually chasing customers for payments or dealing with late fees and missed deadlines. Recurring payments handle all that for you, freeing up your team to focus on more important tasks, like improving products and services or providing top-notch customer support.
- Customer retention – It’s a win-win situation! With this hassle-free option, your customers will enjoy a seamless and convenient payment process, which increases their satisfaction and encourages long-term loyalty. Happy customers are more likely to stick around and refer others, helping you expand your customer base.
In a nutshell, recurring payments are a merchant’s best friend. They bring financial stability and allow you to predict future revenue – crucial for making business decisions.
It’s no wonder why businesses everywhere are embracing the power of recurring payments!
How to set up recurring payments with Total Processing
If you want to implement all these tips, then you’re going to need a payment provider that allows you to do so. That’s where Total Processing comes in. Here’s a quick overview of how to get started with setting up recurring payments:
- Strategy session – You’ll get a one-to-one with your allocated salesperson to discuss the best solution for your business.
- Onboarding – If you’re not already onboard with us, we will process your application and get you integrated with your own Total Control platform.
- Guide you through the integration – Then it’s time to integrate your recurring payment solution. We have a detailed but easy to follow step-by-step guide for your developers on how to integrate the relevant plugins. Come across any issues? No problem, our team will be available to provide support whenever you need it – You’ll never be left in the dark!
- Go live – Once you’re all set up, you’re ready to take recurring payments. The Total Control platform is so easy to use, and you’ll be watching your revenue soar in no time.
Recurring payment frequently asked questions
What if my customer’s transaction is declined?
There are reconciliation features in place to ensure the transaction goes through. If it’s due to a lack of funds, then the payment can be automatically retried at a different time, or you can send a pay by link so that the customer can make the payment at a time that suits them.
What if my customer’s card is out-of-date?
No problem, our account updater tool will automatically update expired, lost or stolen cards with their latest card information.
Will getting a new debit card stop their recurring payments?
No, just like above, the customer’s card details will automatically update so there’s no interruption to their payments.
What if the customer wants to stop recurring payments on their credit card?
Depending on the reason, you have a couple of options. You can either offer multi-card registration so that the payments can be taken from a different card or offer them a break in the schedule if it’s due to financial strains. So, don’t worry, there are a few tactics to prevent losing the customer altogether.
Are you ready to see the benefits recurring payments could have for your business? Have a chat with one of our payments specialists and let’s get you set up.
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