India is on its way to becoming the biggest name when it comes to online transactions. Most of this change can be owed to the fact that people are terrified to go outside and make purchases with physically exchanging money. This has also given rise to the number of people opting for subscriptions for their regular requirements. Be it entertainment or shopping, subscribing to a service that requires periodic payments has made life easier. India payment gateway services have been becoming popular and have given way to companies to receive a significant number of payments regularly.
According to the data by the National Payment Corporation of India (NPCI), October 2021 saw a rise with 4.03 million autopay transactions. Payment collection is a practice that has to be done with utmost precision as it deals with customer satisfaction. In the following article, we have discussed a few of the best practices which a business can use when collecting recurring payments online.
Best Practices for Collecting Recurring Payments Online
By adopting safe and suitable payment collection practices, businesses can increase revenue significantly. In the case of the collection of recurring payments online, there are a few ways to attract more subscribers and provide your customers with a pleasant shopping experience. Any online platform for Ecommerce business thrives on the type of customer engagement it receives. Higher the engagement, the greater the revenue. Product and service subscriptions are a valuable tool to increase the number of daily transactions.
Customers often subscribe to products or services that are bought at frequent intervals in exchange for discounts and cashbacks. This way, businesses make more money as increased sales as well as gain loyal customers in the long term. Subscriptions can be increased if you adopt practices that make it easier for customers to make recurring payments involved in paying for monthly, quarterly or annual subscriptions. Following are some of the effective practices that can give you higher revenue and satisfied loyal customers if adopted.
- Customizable Billing: The most common issue with payment collection is the insufficiency of funds in the customer’s account. This can be eliminated by providing customized services for periodic payments.
Give your customers the option to pick their preferred date and frequency of recurring payments. They can line up the payments with their payday or the time when their bank accounts have ample amounts of funds. In India, payment gateway names like Zaakpay provide customized services regarding recurring payments made by customers. Through customized billing facilities, customers would have no problem with their automated deductions and would not miss even a single bill payment.
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- Optimized Retrying and Billing: At times, when a customer fails to pay their subscribed payment, their subscription is failed, and they are churned out of the transaction. This is a problem for customers as well as businesses as it results in losses. Involuntary churning can be eliminated by optimizing smart retrying and billing systems. With this development, failed payments would be retried several times to ensure secure payment. Payment collection failures affect the customer experience in the long term and cost businesses valuable revenue. Payment gateway such as Zaakpay make it a point to optimize smart retrying for failed subscriptions.
- Updated Card Information: A report from IBM says that 16% of customers have reported their subscriptions being cancelled after they had forgotten to update their payment information. Online payment collection depends on updated card information. Always make sure that the customer card information is up to date.
This would convert the majority of transactions into successful payments and minimize failures. By using updating systems, you can make sure that the customer is able to provide you with necessary updates if and when their card information changes. India payment gateway services such as those offered by Zaakpay update information at regular intervals to ensure seamless recurring payments.
- Alternative Payment Methods: Recurring online payments are subjected to failures due to the restrictions businesses have on payment modes. If you are one of those businesses that allow a certain payment method for their customers, chances are you would lose customers as well as transactions in the long run. Customers make automated payments through their bank accounts with the help of credit and debit cards. As per GoCardless, debit card transactions have a larger success rate with 95% to 100%, as compared to credit cards with 80% to 90%. If you allow more than one payment mode for payment collection, transaction and payment failures will not create issues in your overall revenue.
- Avoiding Late Fee: Most online businesses have a late fee policy whenever a customer fails to make a payment. This is done so that the customer continues valid automated payments by ensuring sufficient payments in their accounts.
However, some companies force large sums of money as a late fee on customers and end up losing business. Make it a point to impose late fees and fines on customers as a last and final resort. Imposing unnecessary fees and fines leave a bitter taste in your customers’ mouths. You might end up losing valuable and loyal patrons if you do not respect their occasional payment issues and situations.
In conclusion, recurring online payments make up a large chunk in the totality of online payments received by merchants and businesses. If you are not careful in adopting the most efficient practices when it comes to these periodic transactions, customers will not feel comfortable in making subscriptions for your goods or services. Payment collection methods may be many, but their efficiency would decide the number of customers you retain as a business. The points mentioned above are detailed suggestions that must be considered if you are thinking of receiving recurring payments online.
Putting your customers’ satisfaction as your utmost priority would be in your best interest if you want to increase revenue in the long run. Apart from that, your own security and safety while receiving payments must also be of paramount importance. Adopting the best practices for collecting recurring payments online would fulfill both the requirements.
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