Recurring Billing Explained: Meaning, Types & Benefits for Businesses

What is Recurring Billing? Definition, Its Types, Business Benefits

Recurring billing is an online payment solution for businesses that typically collect frequent and scheduled payments. It offers you a number of benefits, from increasing your business cash flow to improving your productivity, reconciling with its automation, and more.

If you are looking for an auto-debit software for your company, and want to level up revenue. This solution is designed for your organization to support operations and streamline your journey with subscription-based or similar business models.

In this post, we will discuss all the details about the recurring payment solution for a business. It will help you get a clear understanding.

Let’s get into the depths!

A. What is Wonderpay’s Recurring Billing?

It is an auto-debit payment collection system. It allows subscription and membership-based business models to increase their cash flow by accepting all payments without any restrictions. This recurring billing platform enables you to collect payments securely, with no extra efforts, and from all payment methods - including UPI, credit or debit card, e-wallets, and more.

Additionally, the recurring solution enables you to collect the dues without manual intervention. With its auto follow-up, in-app messages, and push notifications, you free yourself or your dedicated team from such repetitive tasks.

B. How Can Businesses Benefit from Recurring Billing?

The recurring payments provide an easy solution for your business customers. It is because you give them an option to pay for what they use.

• Saves Time for Customers and Businesses

One of the best advantages you get is saving your time and your customers as well. The software allows you to automatically send messages at the right time for the due payments. Since this comes with automation within the system, you get paid as the cycle continues.

For the customers, they do not have to repeat the same thing again and again as the next bill arrives. This allows customers to sign up for your service and enables auto payout from their account. So, when the next cycle is applied, the payments continue without signing in or choosing a payment method.

• Leverage Automation

The automation eliminates all your company’s manual efforts that are usually prone to errors. A payment gateway’s automated recurring invoices solution drives you with an improved experience. The system works on its own without any input from your side or the dedicated team’s side.

• Visualize How Much You Are About to Generate

You are aware of what number of subscriptions you have distributed, what number of people who have selected similar payment methods, and more.

When you get detailed data, you get to know how much you are going to generate for that specific time. It is one of the top benefits your business will be leveraging.

• Let Your Customers Pay for What They Use

Did you experience Netflix’s 149 package for one screen? You may have! It allows its customers to pay for what they choose. This solution allows your organization to collect online payments in parts as you schedule for your services or products.

C. Types of Recurring Billing You Should Know

Typically, there are two types of recurring billings: fixed and variable billing. Further, the variable billing gets two more types, which are based on usage and quality-based.

In this section, we will know recurring billing types in detail. This way, you will get a clear understanding of all of them.

• Fixed Billing

The fixed recurring billing means a fixed amount will be collected from a business customer. It is the best option for businesses like a newspaper organization or magazines, software services, video streaming channels like YouTube, Netflix, Amazon Prime, Vimeo, and more.

• Variable Billing

Within variable billing, the amount might change in every payment cycle. These types of bills are created based on a user’s usage of a product.

The variable billing also includes its two types, which are as follows:

• Metered Billing: The metered billing is generated based on a customer’s usage of services.

Example: The best example for this type of billing includes creating billing for a user’s internet services, and another example is utility bills, such as your electricity usage.

• Quantity-Based Billing: It helps collect payments for the quantity that the two parties agree upon. Suppose, between you and your customers, you had a discussion about a particular quantity.

Example: the best example for quantity-based business model payments is a license for software usage, like video editing software, a tool, or your writer like Grammarly, and many more.

D. How Does a Billing Solution Work?

The working of a billing software is simple. It completes within 7 easy steps that are discussed step by step in this section.

1. Data Input: Within the first step, the customer’s and the product information are entered into the system.

2. Recurring Invoices Generation: Now, Wonderpay’s automated recurring billing software starts. It does not need your manual intervention. The information you entered into the system will create an invoice based on the same data.

3. Invoice Delivery: The message a user gets with the payable amount. Within the third step, the system sends an invoice to the customer using various channels they registered with, such as email ID, SMS over a phone number, WhatsApp, etc.

4. Payment Collection: A payment gateway like WPay plays a significant role as the customer makes a payment. It does not matter what payment method your customers are familiar with. You can accept all your payments, whatever payment method they use, without any worry at all.

5. Status Tracking: The software will check for payment updates and mark the status as paid or unpaid in real time. Here, it updates the account immediately.

6. Automated Processes: For recurring billing, the system will help you with its automation to generate and charge new invoices at predefined intervals.

7. Integration: This is one of the great options that improves your business productivity. It brings data consistency and streamlines cross-departmental operations, also.

E. What Are the Challenges in Recurring Billing?

A recurring billing payment gateway in India provides you with various benefits. At the same time, it comes with some common challenges, also, which you must also consider. In order to improve your business image, deliver the finest solutions your customers expect from you.

In this section, we are going to discuss some of the crucial points that you should consider.

Payment Failed

What will happen if your payments fail? It may put you to face several issues, such as:

• Sales get down
• Churn rate increases
• Losing brand trust

A poor payment system makes it difficult for a business to manage such a huge issue. Therefore, getting started with a trusted system will help you drive a connected experience. So, you should consider this challenge and connect with a trusted payments service provider.

Are Payments Secure?

The online payments solution, like recurring billing meaning security first! Therefore, you need to make sure that the system is secure enough. To make all your business transactions encrypted and avoid any fraudulent activity in the future.

F. Who Can Benefit from Recurring Billing?

It is a great option for businesses that want to accept scheduled payments. In this section, we will discuss some of the real-life examples.

Libraries: The libraries can run smoothly by accepting membership payments from students, professionals, etc.

Gym: Are you a gym business? If so, you may be getting multiple payments, right? The recurring solution for online payments fulfills a gap for monthly payments.

News or Magazine Providers: The digitization has connected all of us. However, your news and magazine readers want the flexibility to pay online with a transparent system. Getting started with a trust payment gateway solution for recurring payments can help you a lot.

SaaS software: The SaaS (Software as a Service) companies can easily accept payments from their customers. The software assists you with recurring invoices generation, whether you need it for quarterly bill payments, monthly, etc.

FAQs

1. What is recurring billing?

Recurring billing meaning defined with the name itself. It collects online payments automatically in parts for the services a person uses over a particular time. It is a subscription fee collected every month, quarterly, or annually as a customer chooses to pay.

2. What are the challenges in recurring billing?

You may find a few challenges in recurring billing, but it can be solved with the help of an experienced payment gateway. The challenges you may face are security issues, difficulty in integrating the solution with third-party solutions, expensive solutions, trust issues like adherence to compliance, like PCI DSS, and following RBI guidelines.

3. What is the difference between recurring billing and invoicing?

Recurring billing is an online payment solution to get service or product payments in the form of a subscription for monthly, quarterly, or annual payments as the business sets. On the other hand, an invoice is to create a printed or soft copy of payment information with all the details. It can be generated by recurring billing software, also.

4. How do users pay easily with recurring software?

Whether a user has recurring credit card billing, pays using UPI, e-wallet, netbanking, etc. A business can accept any payments from any method easily, with all the details. Once a user allows for auto pay, the amount will be deducted and credited to your company’s account.