Recurring Payments: Leading the Online Business Revolution supported by Transact Bridge
Recurring payment
Recurring payments are automated transactions where customers grant permission to merchants to deduct money from their accounts at regular intervals for goods and services. Merchants must obtain consumer consent before implementing this payment method. The agreed-upon amount is automatically withheld by the merchant until the customer cancels the subscription or the offer expires. Various industries, such as e-commerce, fitness, streaming services, subscriptions, and utilities, have experienced a surge in the use of recurring payments. Implementing this method as a merchant can save time, reduce paper waste, and enhance payment data security.
Why can an offshore merchant not get recurring payments on cards?
The Reserve Bank of India (RBI) had issued a framework for processing e-mandates on recurring online transactions. It has made AFA (Additional Factor of Authentication) mandatory for all recurring transactions below ₹5,000 on debit cards, credit cards, UPI, and other Prepaid Payment Instruments (PPIs), and all stakeholders are required to ensure full compliance with the framework by September 30, 2021.
This directive is applicable to all recurring payments which were earlier debited automatically from customers' cards (credit/debit/prepaid) for mobile, utility, other recurring bills as well as subscription payments like OTT streaming services.
Recurring Payment Market outlook (2023 to 2033)
Newly-released Recurring Payments Market analysis report by Fact.MR reveals that the global value of recurring payments in 2023 was held at US$ 130.2 Billion with 6.9% projected growth during 2023 - 2033 , the market is expected to reach a valuation of US$ 268.7 Billion by the end of the forecast period.
Revenue through subscription based business is expected to be the significant revenue-generating component of recurring payment, projected to grow at CAGR of over 5.4% from 2023 to 2033.
What are you missing on ?
Following are the pointers that we can get only on Recurring payments
Reduce Late Payments
Customers are assessed penalties for late payments because businesses require a regular cash flow to function. Late payments often damage client relations because, depending on the frequency of late payments, firms may impose late penalties or refuse to provide a customer with future goods or services. Merchants can set up recurring payment plans to assist avoid these late payments. This payment approach will make payments more reliable and timely so that businesses won't have to make educated guesses about their monthly or quarterly cash flow.
Customers are assessed penalties for late payments because businesses require a regular cash flow to function. Late payments often damage client relations because, depending on the frequency of late payments, firms may impose late penalties or refuse to provide a customer with future goods or services. Merchants can set up recurring payment plans to assist avoid these late payments. This payment approach will make payments more reliable and timely so that businesses won't have to make educated guesses about their monthly or quarterly cash flow.
Lower expenses and waste
Recurring payments are a useful strategy for cutting expenses and paper waste, much like other environmentally friendly company practises. According to a report, small firms who use digital billing save between 40 and 50 cents on each invoice. To demonstrate this, consider that mailing 20 invoices to clients each year equates to approximately 7 pounds of paper. The manufacture and delivery of the paper results in the emission of 171 pounds of greenhouse gases, 63 gallons of wastewater, and 5 gallons of petrol, among other expenses and pollution. On a larger scale, transitioning to digital billing can save a business that now mails 500,000 paper bills each month at a cost of $0.05 per bill $25,000 per month.
Secure Payment Information
Businesses that take recurring payments can assist in managing sensitive payment information for clients in a safe manner. It will be less likely that sensitive information will be improperly accessed by other parties if paper bills are not used. In fact, paperless billing eliminates the need for a middleman like the USPS or FedEx to properly transport cheques to businesses and billing statements to customers. Instead, businesses may use recurring payments to have clients pay them quickly and continuously. Additionally, clients are spared the trouble of having to provide their cardholder information for each payment cycle.
Businesses that take recurring payments can assist in managing sensitive payment information for clients in a safe manner. It will be less likely that sensitive information will be improperly accessed by other parties if paper bills are not used. In fact, paperless billing eliminates the need for a middleman like the USPS or FedEx to properly transport cheques to businesses and billing statements to customers. Instead, businesses may use recurring payments to have clients pay them quickly and continuously. Additionally, clients are spared the trouble of having to provide their cardholder information for each payment cycle.
Last Points
Receipt of regular payments has a number of advantages, but there are also certain disadvantages that businesses should be aware of. For instance, there is a chance for involuntary churn, which implies that consumers' subscriptions might be cancelled as a result of a missed payment. A card on file expiring or being replaced after being lost or stolen as a result of credit card theft are two possible reasons for these unsuccessful payments. While 41% of cardholders have replaced an expired, lost, or stolen card, it is estimated that 20% of consumers have missed a subscription payment owing to an expired card.
Receipt of regular payments has a number of advantages, but there are also certain disadvantages that businesses should be aware of. For instance, there is a chance for involuntary churn, which implies that consumers' subscriptions might be cancelled as a result of a missed payment. A card on file expiring or being replaced after being lost or stolen as a result of credit card theft are two possible reasons for these unsuccessful payments. While 41% of cardholders have replaced an expired, lost, or stolen card, it is estimated that 20% of consumers have missed a subscription payment owing to an expired card.
Make recurring payments easy with Transact Bridge
Transact Bridge offers a comprehensive solution to enhance your online business model and boost profits in the Indian market. By partnering with Transact Bridge, you can improve your authorization rates, reduce churn, and expand your customer base globally.
One of the key benefits is revenue maximisation through easy recurring payments. Transact Bridge overcomes the challenges of recurring payments in India, such as regulations on card scheme tokenization and restrictions on payments above a certain threshold. We enable you to accept recurring payments through various methods like Cards, UPI, and e-mandates, ensuring the highest success rate in the industry. Transact Bridge Providing UPI and recurring UPI to merchants as your trusted reseller partner.
Integration with Transact Bridge is seamless and hassle-free. Once integrated, you don't have to worry about additional tools, tax compliance, reporting, invoicing, or payment issues. We provide a future-proofed reselling infrastructure and a team of experts to support all your SaaS sales needs.
Being directly tax compliant via Transact Bridge eliminates the burden of keeping up with ever-changing tax regulations in India. We handle all tax-related matters as your Resellers, allowing you to focus on business growth.
Transact Bridge employs intelligent routing and dynamic retry logic, an extensive local acquiring network, and global banking connections. This ensures that transactions are resubmitted at the optimal time, considering variations in authorization rates based on factors like country, time of day, day of the week, or month.
