Back to Glossary

Recurring Transaction

What Is A Recurring Transaction?

Simply defined, a recurring transaction is a type of charge or payment that is borne by a cardholder regularly at specified intervals for an ongoing service or product. Look at it as an ongoing payment for membership or subscription-based products and services.

How Does Recurring Billing Work?

The recurring transaction works in a simple way. Typically, a customer, who is also a cardholder buys a product or service that is billed at specific intervals, mostly monthly. The merchant or seller will then charge the cardholder an agreed-upon sum during this period until the end-user cancels the service.

Example Of Recurring Transaction

Let’s look into a business and a pet owner to put recurring payments into better perspective. The customer may set up an ongoing order with an online merchant to buy pet food supplies every month. Instead of shopping every other month, the customer authorizes a recurring bill, so that the order is placed and delivered automatically when the time reaches.

Another example of a recurring monthly payment is an electricity bill. You can set up your card to be automatically billed by the service provider at the end of the month, usually at a small discount as opposed to non-recurrent billing.

Types Of Recurring Payments

There are two prevalent types of recurring billing, including:

  • Fixed recurring payment: This mode is common in businesses that offer goods or services for a fixed price. The consumer authorizes the merchant to bill them a fixed amount at every billing cycle, which can be monthly or annually.
  • Variable recurring payment: this is also known as irregular recurrent billing because the amount billed from the cardholder varies at every payment cycle. This model is common in usage-based products and services.

Advantages And Disadvantages Of Recurring Billing

Like any other billing model, recurring payment processing has its advantages and drawbacks too. On the brighter side, it helps businesses retain customers for the long term, given that the consumer’s journey will only come to an end after a canceled recurring transaction. At the same time, this billing mode ensures that customers pay promptly, giving businesses a reliable cash flow.

On the other hand, recurrent billing can be disadvantageous when errors are involved, since they are hard to correct. It also has a negative effect on consumers because they can overlook unnecessary expenses or even get scammed in the process without knowing.

RELATED TERMS

Frequently Asked Questions About Recurring Transaction

What is the best recurring payment system?

The best recurring payment system in the industry is probably Chargebee. The platform offers over 100 currency and payment options. It’s also easy to use and comes with a free option for small businesses.

How to set up recurring billing in PayPal?

Processing recurring payment through PayPal is a go-to option for businesses that want to serve international payments. Here is how you can set it up:

  • Sign up for a PayPal business account;
  • Click on tools;
  • Select recurring payments;
  • Follow the prompts to create a recurring billing button for your site.

How a customer can cancel recurring transactions from credit or debit card?

Customers can liaise with their banking service providers to cancel recurring billing on their behalf. You can do this in writing, in person, or through a phone call, depending on the policies of the credit or debit card issuer.

What are recurring transaction payment methods?

Recurring transaction payment methods can either be fixed or variable, usually charged on debit or credit card, or an international payment service provider, such as PayPal.

You May Find It Interesting

Implementing Product Information Syndication: 8 Best Practices

Implementing Product Information Syndication Software: 8 Best Practices

Implement these product data syndication best practices for eCommerce success. Boost efficiency and compliance with Gepard.

Read more
8 Main Challenges In Product Content Distribution

Product Content Distribution: 8 Main Challenges

Discover the 8 main challenges & best practices in product content distribution and how a PIM tool can address them.

Read more
PIM Tool: Flawless Collection of Retail-Specific Content for eCommerce

PIM Tool: Flawless Collection of Retail-Specific Content for eCommerce

We talk about the Gepard content collection automation tool – the solution for effective and precisely maintaining retail-specific content.

Read more
How To Optimize Product Data For B2B Marketplaces

How To Optimize Product Data For B2B Marketplaces [13-Steps Guide]

In this article, we'll take a look at the 13 steps for optimizing product data for B2B marketplaces, enhancing UX & boosting conversions.

Read more
Shopify-Partner-Fetured
2 min read
Blog

Gepard Product Data Feed is Now Available on Shopify App Store

Gepard's PIM solution is now available for seamless integration with Shopify through the Shopify App Store.

Read more
TOP-2-PIM-Blogs-svg
< 1 min read
Blog

Feedspot Featured Top 20 PIM Blogs on the Web: Gepard PIM Are In

Discover high-quality insights for eCommerce and retail businesses in Product Information Management and Syndication in the Gepard Blog.

Read more
15 Things You Sould Know About Product Data Management

TOP 15 Things That You Need to Know About Product Data Management

Let’s explore the top 15 things you should know about Product Data Management, shedding light on its significance, benefits, and functioning.

Read more
Gepard PIM AI Mapping Feature
3 min read
Gepard Updates

Gepard PIM Introduces New AI Mapping Features

Let's embark on a journey to explore what AI mappings are, how they function, and the multitude of benefits they bring to your operations.

Read more
5 min read
Gepard Updates

PIM Tool For Content Collection Automation: Revolutionizing eCommerce

How can the PIM tool help retailers automatically gather eCommerce product content from data suppliers? Find out more in Gepard Features Hub.

Read more
How To Reduce eCommerce Returns WIth Rich Product Content

The Role Of Rich Product Content In eCommerce Return Management

High return rates have plagued the eCommerce sector. How can help product rich content management to deal with this challenge?

Read more

Let’s Get In Touch

Need to contact us? Just use this form

Gepard Privacy Policy
Success