Recurring payments

Unlike a one-off payment, a recurring payment is an automatic payment (following an initial payment) which is repeated at regular intervals to pay for a service or product. It is a payment method used for various types of subscriptions, split payments or services requiring regular payments, such as memberships or rentals.

When a customer selects recurring payments as the payment method, they authorise the merchant to automatically collect the amount owed on their bank card or via their bank account at defined intervals (monthly, quarterly, etc.).

Selecting a recurring payment solution that meets your requirements and your customers’ needs is a key component in offering a seamless payment experience while optimising your conversion rate.

Here are some important criteria to consider:

• Payment option versatility

Opt for a solution that can manage both recurring payments (such as subscriptions) and one-off or split payments. This will enable you to cater for a variety of needs: regular payments for monthly services, automatic payments for scheduled purchases or payments in instalments for expensive products.

• Simplicity for your customers

Your solution must provide a seamless and reassuring payment experience for your users.

• Automation and reliability

Automatic payments must be secure and be completed without interruption, even when a card expires or is replaced. Ensure that the solution integrates services such as the updating of card data, to guarantee regular transactions and avoid failed payments.

Your Payment Service Provider will be able to guide you towards the best recurring payment solution according to your business, customers and challenges.

Recurring payments are an essential functionality for:

• Subscription management: audio and video streaming platforms, press subscriptions, subscriptions to a set-top box, etc.
• Rental services, which require payment methods that suit this model (shoes, bicycles, etc.).
• Split or staggered payments: a one-off payment followed by a payment plan with clear deadlines, for a seamless payment process.
• Etc.

The different types of recurring payments enable merchants to:

• Build more loyalty than with one-off payments: automating recurring payments simplifies the customer pathway, reduces frictions and promotes a seamless and positive payment experience, thereby increasing the likelihood of long-term loyalty.
• Increase their efficiency: thanks to automatic payments, merchants reduce the workload related to transaction monitoring and managing past-due instalments. The most effective tools also include functionalities such as the automatic updating of bank card data.
• Increase conversions: customers prefer flexible options. Offering recurring or split solutions may encourage them to subscribe to or purchase expensive products more easily.

While similar, the terms recurring payments and subscription payments refer to two slightly different concepts and specific situations.

• A recurring payment is a functionality that is used to automatically collect a defined amount at a regular interval. This type of payment may apply to a wide range of situations, including subscriptions.
• Subscription payments are a specific application of recurring payments, which are common in sectors such as video streaming, gyms and monthly box rentals. Unlike conventional recurring payments, they are often governed by a contract whereby the customer subscribes to a continuous offer (for example a monthly fixed fee).

In the event of payment difficulties, MONEXT will make several payment attempts and will present the transaction several times. At every failed attempt, you are notified that the payment failed so that you can contact your customer.

One way to avoid payment difficulties is to select a solution that can provide card data updating: your Payment Service Provider liaises with the networks to recover in real time the new data of the bank card recorded for the payment when a card expires or is cancelled, etc. This helps you to avoid late payments and suspended subscriptions.

When selecting the payment method, your customers are informed that they can pay for their purchase in instalments or choose a subscription system. They will then immediately see the instalment amounts and the payment schedule. 

Upon the purchase, the merchant will specify in the initial payment request:

• The amount and date of the first deadline of the payment plan 
• The amounts and dates of future payments 
• The total number of instalments

Following the purchase, the customer has a clear view of the schedule and can independently manage the subscription.

The customer and the merchant can access the payment plans to view the next pending instalment.