Published On: July 8, 2016

Recurring payments are payments that get charged to customers’ credit or debit cards when they agree to receive regular goods and services from a merchant. Recurring payments occur according to the agreed upon scheduled date, whether it be monthly, weekly or annually. Examples of recurring payments include online services such as Netflix, cell phone bills, gym memberships, utility bills and magazine subscriptions. The convenience feature of recurring payments being automated is what makes it stand out from a customer’s perspective versus having to remember to make regular payments. From a merchant’s standpoint, recurring payments are a handy and lucrative tool as they represent recurring revenue and cash flow… often without lifting a finger.

How Do Recurring Payments Work?

According to MasterCard’s website, recurring payments are an arrangement between a merchant and a customer where the customer authorizes the merchant to withdraw money from them on a recurring scheduled basis. The customer essentially pre-authorizes the merchant to take money from their account for services or goods that they’ve agreed to on a daily, weekly, monthly or annual basis.  Therefore, the customers do not need to remember paying the merchant on a regular basis when money is already being withdrawn hands-free.

Recurring Payments with Direct Payment

Recurring payments with Direct Payment enables an automated recurring payment to be associated with a debit or credit card. In this case, the merchant must collect all necessary information from their buyer, including billing amount and buyer’s credit card information, in order to ensure successful recurring transactions at the agreed time interval (Recurring Payments with Direct Payment) .

Types of Recurring Payments and Associated Business Models

Recurring payments can be facilitated in many industries including entertainment, literature and lifestyle programs. For example, when someone signs up for a gym membership, they are giving the gym the authority to retrieve monthly payments from their credit card in exchange for access to the fitness facilities. Similarly, with a magazine subscription, the merchant charges the reader’s credit card in advance every month to ensure that they receive their money prior to sending out the magazines. Apart from these standard types of memberships and subscriptions, there are other ways in which recurring payments can occur as identified in the sections below.

Subscription Parcels

A popular recurring payment system is Subscription Parcels, whereby the business sends a box of products to the customer’s home. For instance, each month the business sends a box of products to the customer’s home. It is typically fashion, health supplements and cosmetics retailers who utilize this technique, where the customers get their monthly order of products and the business receives money coming in from each of those customers at the same time every month.

Maintenance Plan

HVAC, IT and landscaping services often utilize recurring payments to generate repeated revenue and ongoing business. Businesses such as lawn care services, air conditioning and technology firms often employ a maintenance plan to ensure long term profit. In exchange for recurring payments customers have access to scheduled visits from specialists, who check over their systems, maintain them, and update any parts as required.

Auto-Delivered Essentials

Auto-delivery businesses are operations in which a customer pre-orders daily essential merchandise and items online, and the merchant delivers the items to their door without making the customer go in-store to pick it up. For example, a company like the Dollar Shave Club is a success story in the auto-delivered industry, where new razors are sent each month to go with a compatible handle to the customers, so customers no longer have to worry about rushing to the store to replace their razors on a regular basis. This company is the perfect example where consumers are willing to pay upfront for an item just to make their lives easier and more convenient.

Education and Training

Knowledge is power in today’s world, and customers are willing to spend in order to stay in-the-know. If your business offers advice and aims to educate targeted clientele, you can consider hosting workshops on a regular basis, charging a reasonable subscription fee for people signing up for your online seminar. By creating a series of online videos and inviting customers to access those through a fair membership fee, the business can create regular income through recurring payments and fees.

Appointment Opportunities

If you run a spa, hair salon or medical practices where your business is solely based on appointments, then strongly consider initiating recurring payments program to ensure long-term profits. When you ask your customers if they would like to book the next appointment, you are securing the next payment coming into your account. The merchant should then follow up with a call or text before the appointments to guarantee customers showing up and not losing on their opportunity to best utilize resources.

Membership Clubs

Offering exclusive “access to” regular and seasonal promotions to entice regular customers and rewarding them via loyalty programs, is an effective model for ensuring recurring revenue. This membership fee in itself is bringing revenue for the company. For example, a merchant could charge customers a monthly fee to gain membership in a “club” to gain access to VIP treatments such as bulk discounts, free visits or products within a limited period of time. Furthermore, a car wash could launch a summer program that rewards customers who purchase a three-month membership with unlimited car washes.

Benefits of Recurring Payments

The implementation of recurring payments has several benefits for merchants, so business owners should definitely consider initiating this practice. Recurring payments ensure regular and prompt payment from customers, thus assisting with cash flow and lowering billing and collection costs. Furthermore, it eliminates paper bills and automating a portion of accounts receivable. It also improves customer satisfaction because it makes it convenient for customers to make payments and they don’t need to remember to complete the transactions (Benefits of Recurring Payments and Charges).

What are the benefits of partnering with MONEXgroup for Accepting Recurring Payments with Automated Processing?

MONEXgroup not only offers physical Countertop and Wireless terminals, but we also provide online card processing, which includes e-commerce solutions and virtual terminals that allow our merchants to take advantage of recurring payments and helps build up a long-term revenue base!

Our Gateway has the following benefits:

  • Works right on the site with our SSL certificate, no redirecting to another site
  • On a reliable network operating with Speed & Flexibility
  • Supports management of recurring payments
  • Facilitates enhanced shopping cart functionality
  • Billing and customer support features to help clients manage their payments
  • PCI Compliant secure and reliable

Our Virtual Terminal allows your business to do the following:

  • A recurring billing option with email notifications is easy to set-up and can be issued at specific time intervals for targeted customers
  • Quick and simple data entry of Cardholder ID through an intuitive online user interface
  • A convenient key-in of transaction information with immediate fulfillment
  • Reliable and fast payment processing with accessibility to your funds within 2 business days
  • Unlimited user accounts with multiple roles for each staff member
  • Track transactions per employee with detailed reporting tools

E-Commerce merchants who partner with MONEXgroup for E-Commerce and Virtual Terminal solutions are able to accept Credit card payments instantly. Merchants will be able to offer their customers convenience, security and peace of mind when processing transactions. Merchants can add a seamless payment technology to their services and goods to enhance their regular transactions with speed of service and efficiency. Pease visit MONEXgroup E-Commerce Solutions and Virtual Terminals for more information.

When partnering with the number one payment processor in Canada; MONEXgroup will increase your efficiency and quality of service and lower the related costs. Request a Cost Comparison Analysis today.

Author: Lindsey Lu, Marketing Communication Specialist, MONEXgroup
Contact Info:

Free Cost Analysis: see how you can save with MONEXgroup!

With our payment processing solutions, we give businesses the means to succeed.

Grow Your Business with our Payment Solutions

Accept credit and debit card payments with MONEXgroup payment processing services. Get approved fast. Enjoy excellent customer service that will help you at every step and ensure stress-free setup and operation.

Jumpstart your business potential now with MONEXgroup

Our sales team will diligently work to customize the best solution that will meet your business needs while enabling future growth of your business. Contact us TODAY to receive a free quote, and get one step closer to upgrading your POS payment processing solution.

We are very transparent about our pricing. Due to close partnership relationships with acquirers, we able to offer to our customers the most competitive Visa, MasterCard & Debit Card processing rates available in the market.
At MONEXgroup, we’ve built our reputation on providing the most efficient and extensive level of customer service in the industry. Our services include 24/7/365 technical support and same-day onsite swap service for terminal replacements. Our rapid response policy ensures that downtime to your business is minimized.

Our support agents are available from 8:30 am to 5 pm EST Mon-Fri. All you need to do is call the toll-free number located on your terminal sticker for the best number to reach us at for your particular system.

Our sales consultants are available 7 days a week by phone 1 (866) 708-9339, or a contact form on our website.

form dollar symbol

Get a Free Quote

[hubspot type=form portal=467718 id=8091173b-016a-4961-81d0-963bf117a5f6]

MONEXgroup Insights

MONEXgroup Insights provides all the tools and resources you need to start, run and grow your business.

  • EV Charging

The Future of EV Charging Payment Solutions

Adoption of electric vehicles in Canada is growing, partly due to the ever-growing importance of eco-friendly solutions across all aspects of life, but also because access to EV charging stations is rapidly increasing. Another

Read More