A recurring payment is an automated charge to a consumer’s credit or debit card that occurs on a regular basis or for a period of time.
Recurring payments save both consumers and businesses time and money. They enable the consumer to sign up for regular transactions that automatically deduct from their account at regular intervals for a period of time.
Subscriptions are a popular form of recurring payments. When a consumer signs up for a subscription, they receive weekly or monthly benefits, products, or solutions — such as access to a streaming platform, a product box that comes in the mail each month, or a consultation from a brand’s representative. During the sign-up process, the consumer enters their personal and payment information, and the system automatically completes the transaction at each interval.
Recurring payments offer consumers the convenience of not having to initiate a transaction at every purchase. On the business’ side, recurring payments help retain customers and provide consistent revenue over time. Ecommerce businesses can use recurring payments to provide seamless, loyalty-boosting customer experiences.