Recurring billing is when a merchant automatically charges a customer for products or services at predefined intervals of time. This time interval can be weekly, monthly, annually, or any other specific time period chosen by the customer. Nowadays, most of the online businesses opt for recurring billing management systems. It is the most convenient and secure way of handling recurring payments from subscribers without any hassle. No matter what type of online business you run, recurring billing management system can be of great help to you for billing your customers timely while availing many other benefits.
Some of the advantages of recurring billing management platform are discussed below-
No Missed Payments
There are always chances of missing your customers’ payments unless you opt for recurring billing. A recurring billing management system automatically charges your customers after a specific period of time. And hence, there is no chance of missing out payments for your online business. For instance, the OTT platform Netflix offers its customers auto renew option, which is a use case of the recurring billing management system.
Reduced Administrative Cost
Managing the billing for your online business, be it e-commerce store, OTT channel, job portal, or any B2B SaaS business, accounts for a significant portion of the business administrative cost. Handling each of your customers’ payment in a timely manner will cost both your time and money unless you opt for a recurring billing management platform. It streamlines the recurrent billing related activities based on the subscription model chosen by the customers and reduces the overall administrative cost for your business.
Do you know, the administrative cost associated with manual billing represents more than 20% of the total administrative cost of the business?
Manual billing is often prone to various human errors such as data entry errors, calculation errors, and others. This in turn affects the revenue of your business and customer experience. By adopting a recurring billing management system, you can reduce such errors and lower the chances of the associated revenue loss.
The data entry error rate in manual billing can be nearly 4% while the same in a good recurring billing management system is 0%.
The flexibility of a recurring billing management system lets the customers choose their preferred subscription models. Such recurring billing management platforms offer flexible billing cycles for all your customers without missing a single transaction though. For instance, some customers may prefer monthly billing while some may opt for quarterly billing, and a recurring billing management software handles all these in a hassle-free way. Furthermore, customers can change their subscription plans at any time without you having to do anything. For instance, the flexible billing management system of Netflix lets the users change their streaming plans as per their requirements. It offers various streaming plans to its subscribers such as mobile, basic, standard, and premium along with downgrade and upgrade options.
Multiple Online Payment Gateways
A sound recurrent billing system generally offers multiple payment gateways so that your subscribers irrespective of their geographic location can pay securely through their preferred payment gateways. In addition, with integration, you can add your preferred payment gateway or even your own payment gateway. Most of the leading online businesses use multiple payment gateways such as PayPal, Stripe, BillDesk, and PayU, to name a few.
Real Time Reports
The task of an efficient recurring billing system is not just limited to managing billing. It also provides real time reports giving you the insights on the key metrics such as the number of new sign ups, average revenue per customer, upgrades and downgrades, customer life-time value and others over a period of time. These real time reports are important to have a clear understanding about how your business is doing and what improvements it needs to increase your recurring revenue or business profitability. Research shows that on an average a business is expected to grow between 10% to 50%, and real time reports play a vital role in assessing the growth rate.
The safety and security of the customer payment data is very important for any online business. Most of the recurring billing management platforms are PCI compliant and provide secure transaction solutions to customers. Building your own billing management platform, implementing safety & security features and getting a PCI compliance certificate on your own is not only a tedious task but will cost you time and money. You can bypass all these by simply choosing a recurring billing management system and use that time and money in other areas of your business.
Statistics showed that the online payment fraud rate grew over 60% in 2019. And so, the online businesses are adopting secure billing management platforms increasingly.
Promotional offers such as discounts, coupons, bundle services etc. hold user attention and can increase customer loyalty. With the help of a recurring billing management system, you can take care of this part. Most of the online businesses such as Hulu, Amazon, eBay, and others give promotional offers to their customers. For instance, the OTT platform Hulu has come up with Hulu, Disney+, and ESPN+ bundle to draw the user attention.
Survey says that more than 50% buyers or customers search for promo codes before making a purchase.
Uninterrupted Billing Solution
Your customers always prefer a seamless transaction experience. Interruptions such as payment failures, lack of multiple currency support, language problems, and others are a big turn off to them. Such disruptions can even make your customers not continue with your subscription. Most of the leading recurring billing management systems not only have multiple payment options, but they come with multiple languages and currencies to provide your customers satisfactory billing experience.
Research says that failed transactions may lower the sales up to 10% and sometimes even more.
Muvi Billing is a recurring billing management platform which offers 17+ payment gateways, automated billing solutions, smart record keeping, flexible billing, analytics & insights, and carrier grade security. Take a 14-day free trial to know more.