Recurring Payments is a special service that can be used with Credit and Debit Cards or with ACH services. This service allows the advance scheduling and automatic processing of payments on a particular day of the month or any other frequency.
Essentially, recurring payments are automatic payments that an account holder allows to be deducted from a bank account or credit or debit card on a regular billing cycle. This type of payment can be helpful for both the party receiving the money and the one being billed.
For users, recurring payments can protect them from missing or skipping future payments, whether inadvertent or not. In other words, automating the process reduces the possibility of human error in authorizing payments. Additionally, it provides a much more reliable payment solution for the merchant or receiver of the funds.
Account holders, for example, can use recurring payments for everything from household bills to gym memberships to subscriptions and insurance bills.
One of the main reasons that businesses have instituted recurring payments is to avoid customer churn, which is the amount of customers that stopped using a merchant’s service. While this may result from a customer canceling a service, it often occurs when a customer doesn’t consistently continue payment. For this reason, recurring payments have achieved popularity as a way to make the customer experience as simple as possible.