Online Payments (eCommerce)

How to Choose the Best Recurring Payment System

Today, convenience is key, which is why so many businesses rely on recurring payment systems to simplify billing and subscription management. From ecommerce businesses to subscription-based services, finding the right recurring payment services can streamline your operations and enhance customer satisfaction.

There are many factors to consider, such as each service’s pricing, features, integration, and customer support. You want a reliable, secure, and easy-to-use system that offers the flexibility and scalability needed to grow your business.

What Are Recurring Payments?

Recurring payments are transactions that happen on a regular basis. This occurs when you are automatically charged for goods or services. While the timing of the recurring payment varies, it does require an initial sale or card authorization.

Here’s how it works:

The customer selects the recurring payment option on your website.
The customer agrees to the terms and conditions and waits for authorization.
The customer then enters their credit card information and confirms the payments. From that point on, the customer will be enrolled in automatic payments for a specific period of time or until they cancel the subscription.

Let’s dive into how to choose the best recurring payment system.

1. Evaluate Your Business Needs and Goals

Before choosing a recurring payment system for your business, it’s crucial to assess your specific needs and goals. Consider factors such as the types of products or services you offer, your target audience, and the scale of your operations.

Next, determine the frequency and complexity of recurring payments and any unique billing requirements specific to your business. For instance, you may want to set up recurring payments to integrate with your accounting software for streamlined reconciliation. Or maybe your customers prefer a specific payment method, so you’ll want to ensure the platform you select can support this.

By understanding your business’ needs and goals, you can align them with the features and capabilities offered by different recurring payment systems.

2. Look for Flexibility and Customization

Flexibility and customization options are important to consider when selecting the best recurring payment system for your business. Look for a solution that allows you to tailor payment plans and subscription models to fit your business requirements.

It’s a good idea to check if the systems you’re considering offer different billing frequencies — such as monthly, quarterly, or annual subscriptions — and if they allow for trial periods or promotional pricing.

Customization usually requires some backend work, but you can always ask a payment service provider for help. When you choose a payment provider that enables customization, you can make unlimited plans to improve customer retention by offering a variety of billing cycles with flexible periods and multiple pricing levels.

The more flexibility you have in managing subscription payments, the better you can cater to your customers’ preferences and increase your business’ revenue.

3. Ensure Security and Compliance

When choosing a recurring payment system, you’ll want to prioritize the security of customer data and compliance with industry standards.

Look for a solution that incorporates robust security measures, such as encryption, tokenization, and adherence to Payment Card Industry Data Security Standard (PCI DSS) requirements. Assess the system’s track record in maintaining data security and protecting against fraud before moving forward.

4. Ask for Integration Capabilities

It’s important to consider how well it integrates with your current business infrastructure. Look for a system that can easily blend with your website, ecommerce platform, customer relationship management (CRM) software, and other vital business management systems. This will help streamline data flow, automate processes, and reduce manual work — ultimately improving operational efficiency and accuracy.

Check if the payment system offers application programming interfaces (APIs) or plugins that allow for smooth integration with your existing systems. Look for a payment processor that provides a clean and robust API for recurring payments without requiring weeks of setup before you can start collecting from your customers.

Choosing a reliable payment platform can have a significant impact on your business. From a technical standpoint, it’s important to prioritize the payment provider’s APIs, which provide you with complete control over your customers’ behavior. With these APIs, you can manage transactions, create charges, and assign customers to specific subscriptions.

5. Select User-Friendly Interface

A user-friendly interface is crucial for both merchants and customers. A well-designed recurring payment system should provide a seamless checkout experience. You’ll want to look for features like saved payment information, one-click payments, and customer self-service portals that empower users to easily manage their subscriptions.

Additionally, consider the system’s reporting and analytics capabilities. These insights help you track customer behavior, identify trends, and make informed business decisions to increase your recurring revenue stream.

6. Analyze Cost and Pricing Structure

While all of the above are important factors to take into consideration, you also want to make sure you have a budget in place.

Before making a decision, carefully evaluate the costs and pricing structure of different recurring payment systems to fully understand the fees for payment processing, setup, monthly subscriptions, and additional features or customization options. Also, be sure to consider the system’s scalability and whether the pricing aligns with your growth plans.

While finding a cost-effective solution is essential, be sure to prioritize value over the lowest price. You want a reliable and feature-rich system that can contribute to long-term success and customer satisfaction.

7. Keep a Pulse on Involuntary Churn

Although a recurring payment system is a great way to keep your revenue on track, some drawbacks include hitting spending limits, dealing with expired cards, and declined authorizations — all of which can lead to revenue loss.

Fortunately, you can decrease active and involuntary churn and boost customer retention by partnering with a recurring billing service that offers an automatic customer account updater and other similar tools to reduce declines.

Look for a payment platform that provides solutions like an account updater to help you minimize declines and increase customer loyalty. With this feature, failed payments can be automatically retried at specific intervals, or you can charge another assigned card when a customer’s card is declined.

Choose a Recurring Payment System Wisely

By selecting a system that meets your business requirements and provides a smooth customer experience, you can improve your billing procedures, boost customer satisfaction, and drive growth in the subscription economy. Invest sufficient time and energy in choosing a recurring payment system that aligns perfectly with your business needs.