No matter what type of business you own, you can benefit from implementing recurring payments for your customers. This is an effective approach that saves time, money, and energy spent manually recording and sending payment requests to customers every billing cycle, especially for growing businesses. There are countless successful examples of businesses that have adopted recurring payments, from household names like Netflix to your local gym. If you are interested in learning how to boost your recurring payments revenue, keep reading below.
What Are the Benefits of Offering Recurring Payments?
Before we discuss how to boost your revenue, it’s important to note the primary benefits of adopting recurring payments for your products and/or services. Indeed, there are numerous benefits of offering recurring payments both for your business and your customers.
As a business, you can experience:
- Predictable and more timely monthly revenue
- Increased revenue opportunities
- Increased site conversions
- Improved billing processes
- Less time spent managing and sending payments to customers
- Less late or failed customer payments
- Increased customer retention
- Less customer churn (the rate at which customers stop purchasing or interacting with a business)
Your customers can experience:
- Improved customer checkout experiences
- More trust and peace of mind in your business
- Less worry about making payments since recurring credit card billing doesn’t require customers to receive, open, and pay for each invoice
- Less frustration with manually entering new card information during every billing cycle (this can lead to customers taking their business elsewhere)
- Predictable payment schedules (monthly, quarterly, or annually)
How to Increase Your Business’s Recurring Revenue
Prioritize Data Security
Whether you are brand new to setting up recurring payments or just need a few tips, it’s imperative that your customers’ credit card information is gathered, processed, and/or stored in a secure manner. This is a top priority, especially if you plan to retain your customers and business reputation, as well as avoid serious legal and financial nightmares. After all, digital payment processing is susceptible to fraud. To ensure customer data is protected, credit card companies require businesses to meet PCI compliance. For businesses, meeting PCI compliance is a complex process that involves frequent monitoring and significant labor costs. If a business does not meet compliance requirements and suffers from a data breach, then they will face serious penalties and pay heavy losses for compromising customers’ credit card details. Indeed, companies that repeatedly violate PCI compliance may be forbidden from processing credit cards from major brands. A worst-case scenario is that a business shuts down permanently due to the impact from a data breach.
This may explain why many businesses choose to work with a payment service provider that is already PCI compliant. Most reputable providers will have the time, money, and resources to compliantly protect any type of sensitive data, including credit card information. The provider will store a business’s sensitive data on their own servers, which outsources much of the burden of being PCI compliant . In turn, this gives them the time to focus on growing their business and achieving their goals, while also being PCI compliant and protecting customers’ sensitive data.
Now that we have discussed securing your customers’ credit card information, let’s dive into how you can use an account updater service to boost your recurring payments revenue.
Use an Account Updater
An account updater is a service that allows businesses to automatically update customers’ credit card information. This process takes place before any upcoming payments are due, which can mitigate the issues of failed or late payments. Indeed, this can save businesses time, money, and energy spent issuing new payment requests to customers. A payment company, Adyen, indicates that businesses that use this service with their payment provider could benefit from a nearly 50 percent increase in payment approvals. This statistic highlights the tremendous value that an account updater service can offer businesses that utilize recurring credit card processing for customers.
Additionally, businesses should offer a user-friendly portal for customers to easily update their payment method. Customers will appreciate having a secure way to access and manage their billing information, as payment needs fluctuate.
Why Should Your Business Use an Account Updater Service?
When customers make a purchase on your site, they will likely use a credit card. While this will initially capture the credit card information, it does not mean that the billing information will stay valid forever. Indeed, customers’ account information will change for a variety of reasons, such as having lost, stolen, or expired cards, as well as insufficient funds on a card. No matter the reason, an account updater service is an effective way to not only maintain revenue, but also increase it. If customers forget to update their card information on file, this account updater will help take care of the tedious, yet necessary process of updating the card details.
Indeed, providers that offer account updater services allow businesses to both decrease and recover declined card payment authorizations. This is done by automatically searching and obtaining updated card credentials for customers. In turn, this valuable service decreases the amount of data leakage that can happen when recurring payment charges fail because of changes made to a customer’s account.
TokenEx Account Updater benefits:
- There are zero setup fees
- It’s easy to implement
- Prevent common billing issues that harm your revenue, such as failed or late payments
- Go green with paperless billing (save time and money spent on mailing bills)
- Keep your customers’ cardholder data secure for seamless checkout experiences
Create a Contract for Recurring Payments
Before you start implementing recurring billing at your business, it’s important to have a contract to clearly explain how this process works. This agreement between you and your customers will be a key element in creating streamlined billing, protecting your business goals, and being transparent with customers. Specifically, your contract should include details regarding chargebacks and account billing dates, as well as your approach for handling declined customer payments and recurring payment termination. By taking the time to do this beforehand, it will protect both your business and customers from miscommunication. When your customers know what to expect from the start, they will be more likely to agree to use recurring billing. As more customers sign up for recurring billing, this predictable stream of revenue will help your business continue to grow financially.
Avoid Payment Declines Today
Payment declines are never something any business wants to experience. Since businesses depend on customers to regularly buy their products and/or services, it’s no surprise that more businesses are choosing to work with companies offering account updater services. At TokenEx, our Account Updater allows businesses to refresh stored cardholder data, which maintains valid payment information for their customers. This leads to less payment declines, better customer satisfaction, improved business retention, and fewer overall costs associated with manually managing and updating payment information. As recurring payments continue to become more common, it’s vital to ensure that your customers’ credit card details are accurate, safe, and secure. Contact TokenEx to learn more about our Account Updater, which is just one of several services offered through our Cloud Security platform.