Recurring payment

Sara Heegaard March 3, 20222 minute read

Sara is a copywriter focused on lifting up Recharge's merchants, partners, and their customers. Before Recharge, her past lives included writing and editing at four different subscription... Full bio

What are recurring payments?

Recurring payments (also referred to as subscription payments, subscription billing, recurring billing, and automatic payments) are a key aspect of subscription commerce involving payments for goods or services that repeat on a set cadence. Up front, merchants or retailers must get customers’ permission to automatically charge their credit card or deduct payments from their bank account in exchange for the agreed-upon goods or services. The merchant will then continue deducting the recurring payment amount on the due date until the customer cancels the service. 

Examples of recurring payments include subscription box services, magazine subscriptions, automated student loan payments, and SaaS. 

What are the benefits of subscription billing?

On the merchant side, recurring payments offer consistent income, empowering more accurate forecasting and predictable revenue. This business model also offers the ability to track customer behavior over time and provides multiple touchpoints for communicating with customers, helping brands build an engaged community of subscribers. Finally, recurring payments offer merchants the opportunity to increase customer lifetime value and average order value.

Recharge’s subscription payments solution takes the guesswork out of launching and managing recurring subscriptions for your brand. Customize your payment schedule, skip or reschedule deliveries, offer cross-sells and one-time purchases alongside subscriptions, and notify customers of upcoming deliveries and shipping information.