Using recurring payments or automatic billing is something many of us do each month with our personal bills. It’s an easy and convenient way to make sure you never miss a payment or end up with late fees.
Many businesses offer this as an option to accept payments online, both for their customers’ convenience as well as their revenue. If you’re considering recurring payments or recurring billing for your business, it’s likely a good step to take, especially if you plan to use a B2B payments or an eCommerce payment gateway.
Learn more about these types of payments, how to set them up, how they affect your eCommerce accounting, and how to manage them easily.
What Does Recurring Payment Mean?
A recurring payment definition means it is a type of payment that is set up to withdraw funds from an account or credit card each month. Otherwise known as a recurring monthly payment, you may often use this to pay cable bills, car payments, utility bills, and more. This also happens with subscription payments. You'll need to learn more information about recurring payments if you're learning how to start a subscription box business.
For example, a customer may sign up for monthly deliveries of pre-assembled meals that they cook for themselves (see what is a subscription box), an online coffee subscription, or even custom subscription boxes.
As a business that works with vendors and others, you may want to offer this as a form of payment so that it’s easier to manage those payments and relationships. An accounts payable department handles multiple transactions each month and may benefit from being able to set up recurring payments with you.
Recurring Payment Processing
To process a recurring payment, you’ll need your customer’s financial information. Make sure to keep this stored securely, as a breach could end up revealing their sensitive information to criminals and others. It will also ensure your payment handling meets PCI compliance.
Often, people set up recurring payments using either a credit card, a bank account, or a debit card. You’ll also need their permission to continue drawing out automatic payments each month. Setting this up may be easiest if you use a recurring payment processing system.
Recurring ACH Payment
If you want to accept recurring payments via a checking account, then you’ll need to offer ACH payments. An ACH payment is processed via the Automated Clearing House and takes a couple of business days to clear for the funds to appear in your account.
Financial institutions will need to verify that the funds are in the customer’s account before processing the payment, which is why it takes a couple of days. In some instances, it can be processed instantly, but not all banks offer this feature.
Recurring Credit Card Payments
When you sell online, you have to accept credit card payments, as many businesses use these to pay for goods and services. Many also prefer to use credit cards as it’s easier to dispute fraudulent transactions.
You’ll need a payment processing provider to handle these transactions for you so that credit card information is securely protected through each step of the process. Credit card payments do come along with fees, so make sure to account for that when setting prices for your products and services. BlueCart offers some of the lowest payment processing fees in the industry, which is why so many businesses love using the platform.
Recurring Payment Authorization Form
Setting up these types of automatic payments also means you’ll need an authorization form that customers will fill out during the setup process. The form asks for their name, billing address, financial information, credit card type, the amount to charge each month, their signature, and some sort of cancellation policy that they must agree to before setup is complete.
Having this on file protects you from any issues with recurring payments. This is especially true if you accept ACH payments.
Best Recurring Payment System
There are several different payment processing systems out there, but you’ll want to compare and contrast the features of each before deciding which one to buy. Check out customer reviews as well to make sure their customers are happy with them and that they have a good reputation.
You want to pick a system you can trust that will keep your information and your customers’ information secure. Losing customer information to a security breach can risk their trust in you and your reputation, making this a big decision.
For food suppliers, BlueCart is the best recurring billing management and subscription billing platform. We have some of the industry’s lowest fees and bank-level security all integrated into a wholesale, eCommerce, and subscription billing management software platform. You can even set your invoices to net 30 terms or allow prepayment right in the platform.
Recurring Payment App
You may also want to get a mobile app that will allow for automatic payment processing, especially if you’re a business owner on the go. These mobile apps can alert you to any issues with payments so that you can address them in real-time and keep customers happy and satisfied.
If you’re searching for an app that processes recurring payments, then you should check out options that offer them and request demos so you can see them in action to make sure they’re right for you and your business.
Recurring Payment Software
Along with the app, you’ll need software that can either process invoices or that integrates with your existing payment software. QuickBooks is a common software that businesses use, but it may benefit you to get software that comes with an app and full payment processing system so that you can accurately process your subscription payments and recurring billing.
How to Set Up Recurring Payments
If you’re ready to set up recurring payments for your company, then you’ll need to get your customer to first fill out an authorization form and submit that to you. After that, you can go into your payment processing software and set up invoices to send out monthly to the customer so they will have it for their records. You can then set up recurring billing with their chosen payment method and begin to accept their automatic payments.
Accept Recurring Payments
After you’ve set up your recurring payment system, everything should start running smoothly and automatically. The system will collect your payment and add the money to your business’ account that you put in during the initial setup process. Make sure you go with the best business bank for your industry so you can accept more payments as you grow without increasing your fees too much.
How to Stop Recurring Payments
If, for some reason, you need to cancel recurring payments and need to know how to stop those recurring payments, it should be easy to do so with your system. On the payment authorization form you had a customer fill out, there should have been a portion that addressed how to cancel recurring payments with your company.
Usually, it requires written notice with 7-10 business days of processing time. This should give you enough of a window to go into your system and cancel the payment so that it does not go through again after their written notice is submitted.
BlueCart makes it easy for you and your customers to manage and cancel recurring orders and payments by logging into their account.
How to Stop Recurring Payments on Debit Card
With debit card recurring payments, you’ll need written notice to stop it from processing. Your customer may also need to contact their bank to ensure that they know not to process a payment again. That written notice is required for payment stoppage on any method. You’ll need to go into your system to remove the recurring payments.
How to Stop Recurring Payments on Credit Card
Stopping payments on a credit card is similar to stopping them on a debit card. Many times, people may try to change their credit card numbers to stop a payment but often, financial institutions will transmit the new card data anyway to the payment processor so that the payment can go through. You’ll need to communicate to your customer that they need to send in written notice both to you and to their credit card company so that everyone involved is updated on the situation.
Frequently Asked Questions About Recurring Payment Meaning
What is the best recurring payment system?
The best recurring payment system for food suppliers is BlueCart thanks to their subscription billing platform. They have some of the lowest fees in the industry and bank-level security within a wholesale, subscription, and eCommerce platform.
How do I set up recurring payments?
To set up recurring payments, you have to fill out an authorization form and submit it to the software you're signing up for. Your invoices will be sent to you on a monthly basis so that you have them for your records. During the process, you'll also be able to choose your recurring billing cycle and payment method.
How do I stop recurring payments on a credit card?
To stop recurring payments on a credit card, you have to fill out the portion of your payment authorization form that indicates you wish to cancel future payments. This is typically done with written notice and 7-10 days ahead of processing time.
Final Thoughts
Overall, accepting and processing recurring payments is a good thing for your business. A recurring payment or subscription payment can often help increase your revenue and give you a steady stream of income. If you need assistance with a system for accepting these automatic payments and processing recurring billing, check out a payment processing provider today to learn more. You don’t need to wait for payments anymore and can even accept a recurring eCheck payment on a scheduled basis.