Recurring Billing is a type of billing system where a customer is automatically charged by a merchant for the subscribed goods and services. The charges are debited from the customer’s bank account when the subscription cycle is completed. Customers do not have to worry about paying again and again. Payment reminders for several utilities and subscriptions are a problem for customers and merchants. This type of billing provides convenience to both parties. It is not forceful, the customer will allow the merchant to deduct money from their bank accounts.
What are the different types of recurring billing systems?
There are two types of recurring billing systems:
In this, only a fixed amount is deducted after the completion of your payment cycle. Payment reminders such as insurance premiums, newspaper subscriptions, etc. are some of the examples of fixed billing.
The amount collected from the customer may change every month. A dynamic bill is generated based on how much a customer consumes. Utility bills such as Internet, Telephone, Cable, Electricity bills are some of the best examples in this section.
Why opt for recurring billing?
There are a lot of advantages to opting for this billing system. For example, uninterrupted service is one of the major benefits such as online content. If you take a subscription to Netflix then you will not be prompted again and again for repayment and you can enjoy the content without any interruption. It is also very beneficial for merchants as they retain customers for a longer period.
However, you should be cautious while using this system because it is troublesome to correct a billing error. There might be some services that you may have stopped using, yet those services are still generating bills. As a customer you have to check the listed charges and then should agree to this system. But no need to worry, all transactions are under the strict monitoring of the NPCI and RBI. If you face any type of problem you can complain to the Government of India and your issue will be solved in no time.
How does recurring billing work?
The working system of this billing system is very simple and easy to implement. For more information on recurring billing, you can check out https://blog.cashfree.com/recurring-bill/. Following are the steps involved in the whole process:
Select the option of this billing method
After choosing the service, the customer will visit the merchant website and select the automatic payments option. The list is available on the checkout page of the website.
Accept terms and conditions
The customer will be prompted to accept the terms and conditions of recurring billing. At this point, the customer will agree to the amount charged by the merchant and see the payment schedule, fee structures, expiration dates, etc. on recurring payments.
Input payment information
Customers will have to enter their payment information and will agree to the E-Mandate. The database will store the information of the customer and then agree to the NPCI regulations.
Customer details verification
The payment processor will have to contact the acquiring bank account of the customer and then verify the details of the customer. After all the verification is done, the funds are transferred from the customer account to the merchant’s account.
Once the subscription expires, the invoice is generated automatically and the customer will get the notification from the merchant side. Some of the companies remind the customers to pay the fees before time. It is very helpful in avoiding fines on electricity bills, cable bills, etc. As the whole process is digital and there is no need for physical reporting, it requires very little maintenance. Merchants and customers both benefit from these recurring payment methods. It is very simple to use and super easy to implement.