Recurring Payments are sometimes also referred to as Recurring Transactions, Recurring Billing, Continuous Payment Authority or Subscription Payments and are an excellent way for businesses to automatically take payments for goods or services on a prearranged schedule.
Recurring Transactions requires the merchant to get the cardholder’s permission up front, allowing them to automatically charge a cardholder for an agreed amount of time or until the cardholder withdraws permission.
Once the customer grants the merchant permission to take payment on a recurring basis, no more permissions are needed. Examples of recurring payments include mobile phone bills, gym membership and subscriptions the streaming services such as Netflix or Amazon Prime.
They can be considered a little bit like a Direct Debit, but the payment is taken from a card rather than the bank account.
Of course, recurring payments does not fit all business models. A physical retail store would seldom have a need to bill their customers once a month for the same amount, but for those providing services such as web-hosting, insurance, membership or subscription they can be an excellent tool to get paid, whilst also providing a convenient option for the customer.
It is worth noting that not all merchant account providers have the ability, to accept recurring payments. In order to do so you will need a merchant account and a payment gateway suitable to support and all merchants wishing to use this method will need to be approved by the Continuous Payments Authority where a contract will be issued between the merchant account and the credit card issuing banks to agree that payments can be made without the customers’ specific permission for each transaction.
Gala Technology can help you find the right merchant account provider if necessary and if you want to learn more about how merchant accounts work you can view our helpful guide by clicking here.
What are the advantages of recurring payments for the merchant?
Recurring payments can obviously save the merchant a lot of time, as the payments can be automatically scheduled, alleviating the need to chase for your hard earn funds.
This can obviously also help with cashflow as the business will have some understanding on how much and when the funds will be payable. Steady income means fewer fluctuations in revenue, fewer unexpected losses and late payments and potentially closer relationships with your clientele as recurring payments encourage regular customer engagement to ensure satisfaction to keep the income rolling in.
Recurring payments can also be set up really, easily. Merchants can simply obtain the card details then log into their Gala Technology Merchant Management System and set up a payment schedule. In a few clicks, it’s ready to go. At any time, merchants can also remove the schedule. There are options for setting a future start date and running the frequency just a certain number of times, or even continuously.
How does SOTpay help with Recurring Payments?
Our cloud-based technology does not require any additional hardware or amendments to existing telephony ornetwork set up and is Acquirer and Payment gateway agnostic. Totally eliminating the need for capital expenditure, SOTpay can support businesses of all shapes and sizes in any sector.
SOTpay eliminates the risk of fraud related chargebacks for businesses, by authenticating MOTO andOmni channel CNP transactions and processes the payment in a PCI compliant manner, converting a risky ‘non-secure’ transaction into a ‘secure, authenticated, compliant’transaction in the eyes of the acquiring partner, the merchant can see significant savings in theirMerchant Service Charge's. We have seen businesses save in excess of £40,000 per annum,following the deployment of SOTpay.
SOTpay enables you to send out an electronic payment request in real time, via email, SMS, web chat or electronic invoices.
The flexibility of the SOTpay technology enables the merchant to accept secure and compliant transactions across numerous channels, boosting business by allowing cardholders to complete transactions in their desired channel of engagement. For example, if someone is engaging with the business on Facebook, SOTpay allows the business to take payment within the Facebook Messenger environment.
By preventing cardholder data in its entirety from entering the merchant environment, SOTpay makes achieving andmaintaining PCI DSS compliance easier and more manageable for your business. With liability for fraud related chargebacks eliminated the merchant can also deliver to an alternative delivery address, instead of just to the registered cardholder’s address.
As a disruptive payment technology, the PCI SSC updated their Global ‘Protecting Telephone Payments’ guidelines to include our innovative approach, which gave us tremendous credibility within the acquiring industry. We have subsequently become partners to some of the largest payment organisations in the world, helping to protect and support their merchants against the challenges that business face.