Recurring Billing

Recurring billing improves profitability and cash flow by automating the payment processing process. Recurring payments can be based on time intervals, such as daily, weekly, monthly, quarterly or annual subscription billing. Or, recurring billing can be based on metered usage of a service.

Flexible recurring billing plans increase consumer satisfaction by making recurring payments easy and convenient. The recurring billing module accommodates an unlimited number of recurring payment plans.

Stop Throwing Away Money

One of the main issues with a recurring billing model is card declines. It is not unusual for 5-12% of recurring billing transactions to be declined during each recurring billing cycle. Every declined recurring payment means lost revenue to you.

A decline occurs when the card on file used for the recurring payment transaction comes back declined rather than as an authorized recurring payment. There are many reasons for a recurring billing decline including card upgrades, security breaches, lost or stolen cards, expiration dates, or insufficient funds available on a card.

Declined recurring payments decrease cash flow, reduce access to working capital, and increase operating expenses. Asking cardholders to update information is ineffective, time consuming, and expensive. And gives customers an unnecessary opportunity to cancel the service.

New Recurring Billing Technology Increases Profit Margins

You can now protect cash flow from recurring billing with new payment processing technology. By automatically transforming the majority of declined recurring billing transactions into authorized recurring payments, profits continue to grow.

When a recurring payment is declined, specialized payment processing technology submits the declined transaction to the issuing bank. The issuing bank provides the updated card information to the payment processing system which updates the recurring billing record. The recurring billing transaction is automatically resubmitted for authorization and payment. Once the recurring payment is complete, the money for the recurring billing flows to the merchant.

The entire process is completed automatically. There is no need for the merchant to contact the consumer and the recurring billing payment appears as usual on the consumer’s credit card statement.

Automatically updating recurring billing transactions maintains cash flow, reduces operating expenses, and increases customer satisfaction. Recurring payment revenues are protected, subscription billing periods are extended, service continuity is maintained and account reconciliation is simplified.

Automatic account updating for recurring billing can be combined with a recurring billing transaction recycling. If a card is declined because it is over limit, the transaction will continue to be worked, based on the internal rules, for up to 15 days to receive an approval. The system monitors the card and as soon as there is enough credit available, the transaction is automatically submitted for authorization and payment. This procedure happens without merchant or consumer intervention.

Automatic Updating Recurring Billing Benefits

1. Stabilize cash flow and safeguard income from recurring payments
2. Increase sales and expand lifetime value of consumers
3. Recover potential lost revenue quickly and automatically
4. Decrease operating expenses
5. Control process flow automatically to boost productivity
6. Retain customers by eliminating unnecessary opportunity to cancel service
7. Increase consumer satisfaction by maintaining continuity of service with no risk of disruption

Case Studies

1. SaaS Billing. The very nature of SaaS means recurring payments or subscription billing models are inherent. Consumers of SaaS don’t buy software. Rather, applications are consumed as needed and are paid for based on usage or billed on a monthly, weekly, daily, or even hourly basis. Each month, 10% of the merchant’s recurring billing transactions were declined. The merchant was emailing the consumer to get updated information which was inefficient and time-consuming. After implementing the technology, 67% of declined transactions were automatically transformed into authorized recurring billing payments.

2. Subscription Billing. The merchant is an online entertainment company. Products include music downloads, online casual games, and video streaming. The decline rate for credit and debit cards on recurring billing cycles was 11%. Using the specialized technology, 56% of recurring billing declines are now authorized and the merchant increased revenues from recurring payments by thousands of dollars each month

3. Health Club. National health club chain had 9% of recurring billing transactions declined each month. Customer service representatives said contacting members to update card information was difficult, with many members electing to cancel the service rather than updating recurring payment information. Using the payment processing technology, 65% of recurring billing transactions are now automatically updated and recurring payments revenues have been stabilized.