Recurring payments are commonly used for services and subscriptions. Among the fastest growing industry for recurring billing are SaaS providers, with growth predictions of $21.3 billion in annual sales by 2015.
Recurring billing improves your profitability and cash flow by automating the payment process. Flexible recurring billing plans increase consumer satisfaction by making payments easy and convenient.
Recurring billing models can be based on time intervals such monthly, weekly, daily or hourly. Or be measured on how much a service is used.
Recurring billing uses tokens rather than card data for recurring payments. Cardholder data is encrypted and a token is assigned to the transaction. Recurring payments are processed using tokens.
Encrypted tokens for recurring billing keeps you safe by eliminating the need to store card information on your systems. The burden of cardholder security for recurring payments passes from you to the payment processor. And helps keeps you compliant with payment processing security standards.
It’s not unusual for 5-12% recurring billing transactions to be declined during each recurring payment cycle. Every declined transactions means potential lost revenue.
Technology is now available that converts up to 70% declined recurring billing transactions into authorized recurring payments. When a recurring payment is declined, the transaction is sent to the issuing bank which automatically updates the card. Updates include expiration dates, card numbers and account closures.
The recurring billing transaction is then automatically resubmitted for authorization and payment. Once the recurring payment is complete, the money for the recurring billing flows to the merchant.
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.
Recurring billing is a standard feature for SaaS providers, providing customers a cost-efficient way pay for the software. Yet, it is important for SaaS providers to protect cash flow from recurring payments.
Are you a SaaS provider that wants to increase revenues from recurring payments?
Contact firstname.lastname@example.org today.