To enable recurring payments, the consumer must agree to share their payment information with the merchant's payment processor. The consumer must authorize both the initial and subsequent charges on the payment plan (i.e. bi-weekly, monthly, or annually). Recurring payments are often made indefinitely until the customer cancels the arrangement or the card on file expires.
Fixed and variable recurrent payments are the two types of recurring payments. Variable payments may vary from payment to payment depending on a customer's use of a product or service, such as utility bills; whereas fixed payments are charged to a customer's account the same amount each cycle.
PayCly is a well-known payment processor that helps merchants with credit card processing solutions in Singapore. We cater to low-risk as well as high-risk businesses. We provide alternative payment solutions to attract a broad audience and retain the current one.
What's the Difference Between a Recurring and a One-Time Fee?
A single transaction in which a consumer pays for a product or service is referred to as a "one-time charge." No ongoing payment service is authorized between the buyer and seller. Furthermore, unless there is an option to "store" card or bank account details for future purchases, the customer's payment information is not retained on file.
When customers do not make regular payments, one-time charges make the most sense. Offering recurring billing as a payment mechanism has limited value unless clients have a motive to make payments automatically.
However, if your company provides recurring items or services, there are numerous advantages to offering an automated payment option to your clients. Although not all customers trust eCommerce retailers with their credit or debit card information, having it as an option can make online payment processing considerably easier for small businesses to manage.
What Are the Advantages of Accepting Recurring Credit Card Payments?
Let's take a look at some of the benefits of having recurring credit card processing.
- Customers Will Have More Convenience
Customer loyalty is more than just a matter of price. Automatic billing's "set and forget" feature means that customers don't have to think about when payments are due. It adds friction to the customer experience.
Increasing customer convenience improves the brand experience. It is also a customer's additional reason to stay with you rather than go to a competitor. When 74% of consumers are inclined or somewhat likely to buy based only on their experiences, recurring billing can have a significant impact on overall customer retention.
- Increasing the Number of Products or Services Available
It's not just about introducing another payment method when you provide automated payments. Recurring billing enables businesses to develop new product or service offerings that are very marketable in today's environment.
Payment Processing Time and Effort Minimization
Late payments, or payments that are completely missed, are detrimental to a company's efforts to establish a consistent, reliable cash flow. It's also bad news for customer relationships; if a client keeps missing or delaying payments, you might have to consider letting them go.
Spending time chasing down clients with invoices or late payment interest is not only inconvenient for a business owner; it also diverts attention away from other aspects of the company, perhaps resulting in missed opportunities to expand.
You may eliminate manual invoicing activities. And spend more time on other things by using a recurring billing system to receive payments and save credit card information.
Defend Yourself from E-Commerce Fraud
Card Not Present (CNP) transactions continue to rise, and payment fraud has become a widespread and rising concern in eCommerce. CNP fraud is expected to cost retailers $35.54 billion globally in 2020, according to Vesta. Chargeback fraud, in which reimbursements are requested from card networks for fictitious reasons, accounts for a large portion of this.
PCI-compliant recurring payment processors and point-of-sale systems enable secure transactions and the preservation of sensitive data, allowing businesses to better protect themselves and their customers from fraudulent activities.
It's not just about assuring a more consistent cash flow or making your
accounting process easier with recurring billing; it's also about providing a more convenient, frictionless payment experience that boosts customer
pleasure and loyalty. Customers are significantly less likely to switch to a competitor if doing business with you is simple. A recurring payment plan
could be one of your most effective acquisition techniques ever, with the added benefit of allowing you to add a new product or service offering.
PayCly is a wonderful business companion if you are looking for
Credit Card Processing Singapore Solutions. We intend to provide effective payment management tools that will help you sustain your payment flow even if your organization may have to deal with cybercriminals and frauds.
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