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Subscriptions, Recurring Payments and Direct Debit

Subscription services are getting more popular every year. The rapid growth of online shopping and  popularity of subscriptions means that the global subscription e-commerce platform market is expected to reach $320 billion in 2027.

In order for SMEs to capitalise on this trend, they need to a subscription payment platform to help them collect recurring payments. In this article we will explore the finer details of recurring payments and the tools available to SMEs for setting up recurring payments with their customers.

 

What is a recurring payment?

Recurring payments have become essential tools for businesses and consumers. A recurring payment recurs at regular intervals and is often used to by consumers to pay utility bills, subscription services, loan repayments, or membership fees.

Unlike one-off payments, recurring payments automate the transfer of funds on a scheduled basis, meaning that the payment continues being made every day, week, month or year until it reaches its expiration date or is cancelled.

 

What is recurring payment processing?

Recurring payment processing for SMEs means setting up a system where you automatically collect money from your customers on a regular basis. It’s like when you subscribe to a service, and your payment gets deducted from your account each month without you having to do anything.

For SMEs, it’s about making it easy for your customers to pay you regularly without them having to remember or manually make payments each time. You set it up once, and then the payments happen automatically according to the schedule you’ve chosen. This way, you can ensure a steady income stream while keeping things convenient for your customers.

 

How to set up monthly payments from customers

Let’s say you have a subscription service or offer a product that customers pay for monthly. Instead of asking them to remember to pay each month, you set up a system where the payment happens automatically.

First, your customer agrees to this arrangement, usually by providing their payment details upfront. Then, at regular intervals, the agreed-upon amount is automatically deducted from their account or charged to their credit card.

If you’re ready to collect recurring payments from your customers, a Direct Debit system is a great option.

 

How to collect recurring payments online

If your business is ready to start collecting recurring payments, there are a few different tools you can use, including:

 

Payment gateway integration

A payment gateway is a network through which your customers transfer funds to you. Payment gateways are very similar to the point-of-sale terminals used at most brick-and-mortar stores.

Some popular Payment Gateway Integrations include Adyen, Worldpay and Stripe.

 

Subscription Management Software

Subscription management software helps businesses manage the lifecycle of their subscriptions. It provides support for managing the subscriber lifecycle, from onboarding to renewals and cancellations.

Some popular Subscription Management Software includes Chargebee, Stripe and Chargify.

 

E-commerce Platforms

If you operate an online store, many e-commerce platforms offer built-in features for managing subscriptions and recurring payments. These platforms often many flexible customisation options.

Some popular E-commerce platforms include Wix, Shopify and Bigcommerce.

 

Invoice Software

Invoicing software automatically generates billing for your rendered services and products. It can streamline the invoicing system, give control over internal functions, and speed up vendor invoice processing.

Some popular invoicing software includes Xero, Quickbooks and Zoho.

 

Direct Debit

Direct Debit software makes it easy to collect payments directly from your customers’ bank accounts. You can then collect recurring payments, take one-off payments, and change payment amounts whenever you need. If you’d like to learn more about how Direct Debit works, read our guide.

Some popular Direct Debit providers include Gocardless, Accesspaysuite and London & Zurich.

 

How to collect recurring payments with Direct Debit

Direct Debit is an incredibly effective, low cost and convenient method for collecting recurring payments for both businesses and consumers.

First, you’ll need to obtain authorisation from your customers to collect payments from their bank accounts. This is done using Direct Debit Mandates, which give you consent to collect directly from your customer’s bank account.

Then, you need to set up a payment in your Direct Debit software, which will connect with the Bacs network to automatically collect payments on agreed-upon dates. These dates could be yearly, monthly, weekly or even daily.

This method ensures that payments are made on time, every time, without the need for manual intervention.

 

London & Zurich Direct Debit

At London & Zurich, we offer high quality Direct Debit software with Xero and Quickbooks integrations, as well as great customer service based in the UK – all at a competitive price.

Contact us Today to find out more, or Get a Quote here.

 

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