Recurring payments do’s & don’t
We all have some kind of recurring service in our household, whether it’s our rent, mortgage payment, electricity bill, phone contract or favourite magazine.
Whenever a recurring payment takes place, the customer has given his or her approval to process the payment once a month, or per agreed payment term for a certain service to be delivered. The acquiring bank then processes that payment through the gateway as per agreed date. This can be done through the credit card or directly through the bank via Direct Debit.
The benefit of this service is that you will never have to worry about an unpaid bill and or late payment fee and or interest fees.
Do’s & Don’ts
- Security: always make sure that the payment processor you have an agreement with for processing your recurring payment has the latest up to date security protocols in place.
- Fraud and Risk Management: with recurring payments a lot of time friendly fraud will happen. The right billing descriptor will prevent a lot of unnecessary chargebacks.
- Billing Descriptor: Make sure your customer has a clear understanding of who’s making the charge. The better the information, the small the chance of a disputed charge.
- Support: give your customer the feedback and support when they do dispute a charge, make sure that you recognize if this is a one-off dispute or a recurring dispute among several customers.
- Payment Gateway: Most of the payment gateways will allow you to process recurring payments, always make sure that the right settings are available before going into the agreement with your payment service provider or acquiring bank.
- Customer retention: Keep your customers up to date with the latest developments in your company, this can be through discount sales, new updated, new products etc. Keep an eye on your customer retention as with recurring billing services the turnaround of your customers can vary widely per industry.