Merchant Processing Services for Recurring Payments

Recurring payments are set up in a way that is very different from single transactions and if your business model involves establishing payment plans, you need to find the right merchant processing services provider to enable you to do that in a fast, simple and straightforward way. In this article I will explain to you how this process is done.

What Makes Up Recurring Payment Plans?

Recurring payment plans are set up when consumers authorize merchants to charge their bank card at pre-determined intervals and for a pre-determined duration (for instance, monthly or yearly). The transaction amounts may also pre-determined or they may be different and the plan can last indefinitely or until it is stopped by the consumer.

So a very good example of a recurring payment plan is a health insurance policy that is set up in such a way that the insured consumer's payment card is charged on a monthly (typically) basis and the insurance is provided either ad infinitum, or, which is altogether more likely, until the policy is terminated by the consumer. All merchant account providers offer this option.

Why Merchants Offer Recurring Payment Plans

There are quite a few benefits for the merchants, including:

• Providing additional payment choices. Consumers appreciate the extra payment options at your checkout.
• Larger participation in web-based merchant processing services. It is an incredible time-saving solution.
• Limiting customer service communications. By pre-determining the payment process schedule, businesses ensure a lower number of payment-related issues.
• Maximized cash flow. Recurring payment plans promote fewer errors at the checkout and a lower number of rejected payments.
• Limiting delinquent payments. Setting up the payment schedule beforehand leads to a lower number of delinquencies.
• Better collection results. As the transactions are processed automatically on a pre-defined schedule, they are much simpler to collect.
• Increasing customer retention. Consumers, too, enjoy the convenience of establishing recurring payment plans.

What Is in Recurring Payment Plans for Consumers

There are quite a few benefits for consumers, including:

• Convenience in setting up all transactions beforehand. It's fast, easy and simple. They won't need to do it over and over again each month.
• Time savings. Once you've set up the recurring plan, you don't need to do anything else. Transactions are then processed automatically.
• Less stress. Customers don't need to remember or keep checking on the date the payment is due and worry about completing a late payment.
• Cost effectiveness. In short, no more buying post stamps.
• Getting cash-back, travel or other card reward points programs. Many businesses qualify for a big number of card reward programs.

Various merchant processing services companies set up recurring payment plans in different ways. Contact your own service provider and request assistance if you don't know how to do it.