Here are the 5 best practices To Adopt for the Recurring Payments

Recurring payments are becoming an important part of the business, rapidly. For recurring payments, there are a number of management platforms available to smoothen the workflow. When recurring payments are automated, various processes become easier to manage as it becomes minimal use of resources and less time-consuming. In recurring billing, there is a pre-set schedule that manages the payments on a given timeline. For recurring billing or subscription management, there are four essential factors to be considered for employing the best practices. The four factors are customer’s bank, merchant’s bank, payment gateway, and recurring billing system.

Managing recurring billing with automation helps streamline significant operations. But there are instances in which the situation doesn’t remain the same and problem is faced at both ends either customers’ or companies’. There could be technical issues like payment frauds, chargebacks, refunds, card declination, and so on. To solve such issues it is important to adopt the best practice that can reduce such issues and enhance the workflow along with the customers’ subscription lifecycle for a better user experience. The five best practices for recurring billing payments are as follow:

Security as a Top Priority 

When the recurring payments are managed, the confidential data of the customers are being stored which needs security at its finest level. Keeping the data secure is at the company’s end along with gathering, processing, and storing data for efficient billing and management. Online payments are fraud-prone and therefore the required actions must be taken. To harness the recurring payments and payment reconciliation, it is important to make the system inclusive of top-notch security that complies with PCI Level 1. Assembled in the subscription management platforms, recurring billing and tokenizing the data can help secure the data at its best. 

A written mandate from the cardholders 

In recurring billing, the payment has to be debited from the customer’s account as per scheduled dates. However, there could be a case that customer claims that their amount has been debited from their account without any authorization or permission. To order such instances, it is important to aware the customers of the whole billing plan before the process starts. As it is said, that written agreement gives a strong confirmation therefore employing written mandate for such transactions must be employed. For this, amount, the day of withdrawal, the period over which the payments will continue, and the customer’s signature must be obtained for a seamless process. 

Communicating Policies Effectively

Communicating with customers plays a vital role when it comes to the management processes. Dealing with recurring billing or subscription management, the companies should communicate policies along with terms and conditions. From notifying them about authorizations from their account to adjustments of amount charged, and emailing to keep them updated is a significant aspect of the business. Not doing so could result in an unprecedented loss both for the company and the customer. Moreover, timely notifications related to their payment plan and processes can also help build customer loyalty. Therefore, employing this practice for subscription management is helpful in the long term.

Notifying Customers to avoid transaction failure 

In case transaction failure occurs, the main reason comes to be the insufficiency of funds. This problem is often solved when the customers are offered to choose the billing dates that suit them the best. However, it must be noticed that it is recommended to break down the payments into weekly or bi-weekly payments to make it feasible for the buyers. Another option that is more helpful for avoiding transaction failure is sending them a pre-billing notification to remind the customers of the due dates for their recurring billing processes. Sending notice 10 days prior to the billing due date would help the customers to get aligned with the dates.

Updating Card information 

Updating card information is what most companies forget to do and this results in transaction failure. When customers get updated information regarding their card, it is important to submit this information to the company. Then, it is upon the company end to update the information regarding the payment methods. If one processes Stripe recurring payments then they would need to update their system and customer’s information. With an automatic account updater, this process has been made a lot easier.

In order to manage the recurring payment system, the practices are required to be acknowledged and employed. In terms of the company’s long-term plans and seamless payment operations, these practices could help to manage the subscription management without any haphazard way. It not only reduces stress but also saves time. There are a number of best recurring payment systems that provide a seamless management system to keep you going with the processes. Schedule a demo now to process your recurring billing management.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, and the Federal Trade Commissions. He is a graduate of Middlebury College. Email:[email protected]

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