Recurring Payments

Annual consumer spending through recurring payments is consistently growing.  Embracing recurring payment models makes products more affordable and can generate larger, more predictable cash flows.  

Recurring Payments are used when a consumer agrees to pay for a product or a service at specific intervals over a certain period of time.  The recurrence may be fixed with pre-determined renewal periods or perpetual occuring monthly, quarterly, or annually.  

Installment Billing plans are popular recurring payment options.  On these plans, the period is fixed and the payments are typically identical.  Payments are generally made monthly, with between 3 and 10 installments.  Becuase the payments are smaller, merchants can sell more products with fewer chargebacks. 

Soft Billing Descriptors are line items that appear on cardholder statements describing their purchases.  Unlike static billing descriptors, soft billing descriptors allow the merchant descriptor information to be modified on a per transaction basis.  Soft billing descriptors allow you to more clearly identify transactions and have proven to reduce chargebacks and improve customer satisfaction.  

Important Tips for Processing Recurring Payments 

• Ask the cardholder for his/her billing address as it appears on their statement
• Provide cardholders with a toll-free phone number to cancel services 
• Process credits promptly 
• Require cardholders to "Accept" terms and conditions 
• Use soft billing descriptors to help cardholders identify charges 

For more detailed information on recurring payments, installment billing, and soft billing descriptors download our eBook.