Whether it’s ongoing subscriptions, service packages, payment installments or some other plan, recurring payment business models can be a boon for your business. After making the effort to win a customer, you are assured of regular, ongoing revenue for a predetermined period. But while it’s great to have predictable earnings coming in, handling those payments efficiently and securely can introduce challenges that might even seem to negate the top benefits of such a model for some businesses. That is, unless you learn how to manage recurring payment processing like a pro. It’s easier than you might expect if you follow this expert guide.
If your business handles a high volume of recurring payments, the first thing to do is to stop manually processing all those transactions. Manually processing recurring payments can quickly erase the benefits of this model due to the amount of time, work and organization involved. You’ll have to keep track of individual billing dates and amounts for all your customers, securely store customers’ payment information or seek them out each billing cycle to obtain their details, potentially have to seek out a new authorization on each transaction, along with a slew of other requirements that can make this model anything but seamless. Even worse, something as simple as running an ACH transaction a day early is enough to trigger a dispute. All this work could even require a dedicated employee to manage these recurring transactions.
But recurring payments don’t have to be a headache if you automate them. Selecting a Merchant Service Provider that allows you to set up regular, ongoing payments automatically can relieve many of the pain points business owners experience with this model. You can simply set up a recurring transaction once and then rest assured that it will repeat automatically – securely, seamlessly, and on the schedule of your choosing.
The key to automating recurring payments is selecting a provider that is capable of securely storing payment and transaction information and that is designed to handle such payments. PayJunction’s Virtual Terminal supports automated recurring payments by credit and debit cards, as well as ACH transactions, and requires you to set up the ongoing payments and seek customer authorization just once.
Flexible scheduling means you can set up transactions to be processed according to your customer agreements – whether that’s weekly, monthly or on a schedule of your choosing – and after a transaction is processed successfully, the funds are deposited directly into your account, with no bank runs required to deposit checks. Lastly, detailed, real-time notifications mean that if a transaction is declined for any reason, you’ll be alerted to the problem quickly. If it’s something as simple as new account information, you can even rerun the transaction with a single click.
Once you have a provider that is capable of automating your recurring transactions, there is some key information that you will require from your customers in order to set up payments and protect your business from disputes and chargebacks. For starters, you’ll need your customer’s payment information and billing address as well as their authorization to process their payments on an ongoing basis. To protect your business, authorization forms should be very specific, including the amount of payment, frequency of payments and billing schedule. This form must be signed by the customer and kept on file.
Because you won’t be confirming each payment with your customer, you may also want to consider enacting a policy that will cover you should a transaction fail due to a preventable problem on the customer's end. While setting up recurring payments eliminates your risk of manual processing errors – such as entering the wrong credit card number – from time-to-time you may experience a rejected payment because a customer forgets to advise you of an account change or update, such as a new expiration date or account number. As with check payments, ACH transactions can also fail due to insufficient funds. Since such failures can incur fees on your end, you may want to include terms within your recurring payment agreements with customers to address such scenarios.
Once you have obtained the required information from your customer, the last step is to set up your ongoing payments. PayJunction’s user-friendly Virtual Terminal makes this easy with a straightforward payment set-up form – simply enter the card or ACH information, payment information, billing contact information and billing schedule. There’s no need to worry about authorization forms – once you’ve entered the new recurring payment, the customer is automatically emailed an authorization agreement. After they sign it electronically, it is stored securely online for easy retrieval. That’s all there is to it – when payments are processed successfully, the funds will land directly in your account.
Does your business have a recurring payment model? What have you found to be the biggest hassle in implementing these ongoing payments? What have you found to be your most successful workaround? Share your tips in the comments below.