Recurring payments are the payments that are due when subscriptions are billed. They are to be repeated on a regular basis or at specified times within certain periods.
Common practices include, for example, monthly, quarterly, semi-annual or annual payments, which are booked at the same intervals. This results – for example – in monthly recurring revenue (MRR), which is an important key performance indicator in the subscription business. Recurring payments offer the same benefits to companies and their customers as recurring billing.
The payment providers Adyen and Mollie provide numerous payment methods (Apple Pay, PayPal, Visa, etc.) that you can make available to your customers.
Companies benefit from recurring payments made by their customers for several reasons.
On the one hand, payments are received on time, eliminating the need for reminders or dunning letters. The receipt of recurring payments is easier to verify and the payment reconciliation can be automated. The company saves on administrative effort and has more time available for core tasks.
On the other hand, revenues can be reliably planned. Recurring payments based on subscriptions make up a solid foundation for successful liquidity management. It is easy to estimate revenues precisely (e.g., via MRR reports), the cash flow is steady, and even customer churn is easier to take into account in financial planning.
Of course, there are benefits for customers as well.
After a one-time entry of invoice data, the data is periodically transferred and the amounts are debited on the fixed billing dates via the selected payment method. This saves customers time-consuming manual transfers.
Customers can be sure that their money is transferred directly from the bank or via payment service providers and that their sensitive financial data is stored securely.
In this way, recurring payment processes improve the relationship between companies and customers.