Skip to main content

How can recurring payments improve your e-business?



If you're offering services based on cyclical payments, then recurring payments (also known subscription payments) will help you work and not worry about forgetting sending your customers a payment notice. Recurring payments come in handy if your business requires subscription fees for the content of a news site or there is a membership fee. Subscription payments are also useful in completing simple payments like power and water bill.
What are subscription/recurring payments?
In short, subscription payments are what happens when a certain amount of money is automatically withdrawn from card or from a client's account, this usually happens in a periodical manner. In practice we can outline three types of recurring payments.
Standing Order
This is a payment where a fixed amount of money is withdrawn from a client's bank account in fixed time periods. This mechanism works well for example, when paying bills online or in case of membership fees. Constant orders are initiated by the owner of a bill, not the actual party that's awaiting payments.
Constant orders are popular in many countries but can vary from one to another. In Germany this type of payment can be set to a certain amount of payments, time period, or for an indefinite amount of time (until cancellation). In the Netherlands only the last option is available. Whereas in Spain it's mandatory to define in what time period payments will be made.
In case of countries where checks are more popular than transfers (e.g. United States), there is a service that works similarly to a standing order. A bank automatically sends a check in the name of a person that is making the payment.
Direct Debit
In comparison to a standing order, direct debits allows for cash withdrawal from a customer's bank account in irregular time periods and with differentiating amounts of money. A good example of a direct debit can be an electricity bill, the amount owed can sometimes change from month to month. A direct debit is initiated by the party that is expecting a payment, that is why there may be a lack of consistency in dates and amounts of charges.
Every country has its own guidelines for direct debits. The only exception to this rule is the SEPA (Single Euro Payments Area) region which extends over countries within the European Union. In this region all transactions done in Euro are regulated and simplified.
SEPA standards became active as of February 1st 2014, however the European Commission has given a six month transitional period.
In the United States direct debits are done through ACH (Automatic Clearing House).
Subscription payments using a card or e-wallet
In this case, money is not withdrawn from a bank account but rather from a card or an e-wallet (e.g. a PayPal account). This type of recurring payment is most popular in the world.
What do recurring payments with a card look like
Using a card to pay for subscription payments is possible only if customers fill in their card data in the shop itself, either by making a purchase or by registering on a website to start using their services. The frequency and method used to withdraw funds from an account is based solely on the web stores business model, what it means is that a card can be charged weekly, monthly, or annually. A card may also be charged only when a customer reaches a certain amount of money due.
From a technical point of view, subscription payments draw back to a previous transaction that was triggered by a card. It is advisable to reference the last made transaction, this will aid in tracking the payments flow.
For more information on how you can integrate subscription payments with cards, check out Awepay Website.
What are subscription payments' limits?
Although recurring payments that rely on a card don't have any limitations (Maybe with the exception in a situation when a card expires), other type of recurring payments may be limited by the law of a given country or procedures adapted by a specific payment provider.
Standing orders and direct debits are completely automated the SEPA region, whereas in Poland they require submitting a disposition in the customers bank. However, the availability of cyclical payments with the use of e-wallets is entirely up the service provider and may be limited by regions.
The advantages of subscription payments
For businesses offering services that require subscription payments, especially ones where a card may be used, this is an ideal solution.
From a shop owners point of view, following through with recurring payments allows them to have a peace of mind. Customers will no longer forget to pay for services when they are due and the consistency will increase income.
For customers the availability of automated payments is also important: they don't have to worry about remembering due dates, because all their payments take place without customers' intervention.
Summing up, if your business model is based on repeated payments for services, content, subscriptions, licenses, membership, etc., then recurring payments can be a great help to your business! They make sure that your incoming payments are always on time, which in turn means financial stability. Your customers will be able to use your services without worrying about being cutoff because of a forgotten payment, whereas you save time and effort by not having to remind your customers about their payments dates.




Facebook : https://www.facebook.com/awepay/
Twitter: https://twitter.com/Awepay
Google + : https://plus.google.com/u/3/115304676174119187533
Awepay Blog : https://awepay4u.blogspot.com/
Awepay Wordpress: https://awepay.wordpress.com/
Awepay Website: https://www.awepay.com


#payments #paymentsolutionproviders #paymentsolutions #paymentsolution #paymentsystems #paymentservices #paymentsystem #PaymentsWithOutBorders #Awepay #Epayment #Promotions #Marketing #Activation #Campaign #Event #PR #ProductLaunch #Retail #SpecialPromotion #Giveaways #PromoItems #PromoMaterial #CreditCard #Summer #Card #Travel #LiveLoveTravel #Payments #Creativity #Execution

Comments

Popular posts from this blog

12 Startups Utilizing Blockchain Technology in New Ways

Author: Awepay Cryptocurrency created quite the buzz this past year. Although the technology has been around for a few years, 2017 was the year it really took off. Bitcoin, the first application of cryptocurrency technology, hit $20,000 a coin, while coins like Ethereum also saw their prices increase. However, the technology behind these tokens, blockchain, has far more applications than just cryptocurrencies. Through a network of smart contracts that operate utilizing decentralized information on a ledger, blockchain is able to provide unmatched security and speed for data transfers. This means that blockchain technology has an application in nearly every industry where value is exchanged. For this reason, many startups have started to explore how this technology can change the way the world works. Here are twelve of those startups, each of which are utilizing blockchain technology in new ways. Related: 10 Reasons Why Good Customer Service Is Your Most Important Metric

4 Trending Digital Payment Methods: Is Your Business Ready For Them?

Businesses and consumers alike are interested in faster, safer, and more convenient payment methods. Are you ready to go digital?   Demographics across the world are shifting. Millennials are now the most diverse and prominent generation in the US population.   As a generation heavily influenced by technology, their buying habits and expectations are all formed via the immediacy that smartphones, Internet, and modern conveniences engender.   Businesses and consumers alike are interested in faster, safer, and more convenient payment methods, as cash is becoming obsolete and credit cards are being phased out. Mobile and social payment options could be the future of millennial-driven purchasing, creating the sort of instant gratification that millennials expect.   Here are a few trending digital payment methods that Millennials will prefer to use in the coming year.     1. Mobile In-Store Payments & Apps The development and usag

EMV transactions: Is it time for you to upgrade?

Even if your business has not yet adopted an EMV-enabled solution, you’re probably somewhat familiar with the technology since it's among the most talked about developments in payments. EMV has proven to be an effective tool to fight card present payment fraud in Canada and many European countries. While EMV is new to the U.S., payment card fraud is not, with nearly $8.5 billion in fraudulent transactions in the U.S. in 2015 alone. What’s more, the U.S. represents nearly 40 percent of worldwide fraud, despite having less than 25 percent of transaction sales volume. EMV defined So what is EMV? EMV technology is based on specifications developed to ensure worldwide acceptance of secure payments by an organization called EMVCo, a group of leading companies in the payments industry including American Express, Discover, JCB, MasterCard, UnionPay, and Visa and supported by dozens of other companies in the industry. EMV has become the global standard for authenticating credit