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What is the best way to set up recurring payments for your e-commerce business?

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Recurring payments are a great way to generate steady and predictable revenue for your e-commerce business. They allow you to offer subscriptions, memberships, or other types of ongoing services to your customers, who can enjoy the convenience and value of automatic billing. However, setting up recurring payments can be challenging, especially if you want to comply with the best practices and regulations for online transactions. In this article, we will guide you through the main steps and considerations for setting up recurring payments for your e-commerce business.

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Select an adaptable gateway:

Choose a payment gateway that supports recurring billing and integrates seamlessly with your platform. This ensures smooth transactions and compliance with industry standards, making it easier to manage automated payments.### *Craft clear subscription plans:Design various subscription tiers with distinct features and pricing. Clearly outline these options to help customers easily select the plan that best suits their needs, enhancing their overall experience.

本摘要由 AI 和以下专家提供支持

Mohamed Abdallah

B2B Marketing Expert | Fintech Trends…
Jakub Piasecki

Developer & Architect | E-Commerce…

1 Choose a payment gateway

The first step is to choose a payment gateway that supports recurring payments and integrates with your e-commerce platform. A payment gateway is a service that processes and authorizes online payments, and connects your website with your merchant account and your customers' bank accounts or cards. There are many payment gateways available, but not all of them offer recurring payment features, or charge the same fees, or work with all e-commerce platforms. You should compare different options and look for features such as security, reliability, scalability, customer support, and compliance with the Payment Card Industry Data Security Standard (PCI DSS).

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Mohamed Abdallah

B2B Marketing Expert | Fintech Trends Enthusiast | E-Payments Expert | B2B Content Creator and Brand Builder | Brand Communication | Communications Strategist & Consultant.
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Select a payment gateway that supports recurring billing and offers features for subscription-based payments. and create different subscription plans with varying features and pricing tiers. Clearly outline what each plan includes to help customers choose the right subscription.

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Oscar Chr?isty

Investment advisory, board member, strategy consultant
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I would recommend Ping payments and its payment platform. Not only because I believe it is superior in the normal key features, but it is a platform and a company who thrives to make their platform and their services enable value creation by design. Look it up!

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Khalid Al Dahmash

Director of Revenue Assurance & Fraud Management Department
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Selecting the right payment gateway is crucial for enabling recurring payments and seamlessly integrating with your e-commerce platform. With numerous gateways available, it's essential to consider specific factors. Look for gateways that support recurring payments, offer competitive fees, and are compatible with your chosen e-commerce platform. Pay attention to features like security, reliability, scalability, and responsive customer support. Additionally, ensure the chosen gateway complies with the Payment Card Industry Data Security Standard (PCI DSS) to safeguard sensitive payment information.

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Ian Kiprono

Senior Java Software Engineer | Building robust, efficient, Java applications using Cloud, Spring, Spring Boot, and Microservice Architecture| Open Source| Avid learner and problem solver.
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One thing that I always look out for is how reliable, secure and compatible the payment system is. Reliable because I know that it will always be there when I need it, Secure because my data and information is free from being sold or compromised, and compatible because I would like to use it with various platforms and softwares.

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Jakub Piasecki

Developer & Architect | E-Commerce, ambitious CMS, Drupal
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Sometimes you may find yourself in a position where you want to use a particular recurring payment gateway with your e-commerce platform and there is no integration plugin between the two (ex. WordPress plugin, Magento module, or Drupal Module). In such a situation hire an experienced e-commerce developer to write a plugin for you. Often that's much easier and, long-term, cheaper than changing the payment gateway or e-commerce platform.

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2 Create a payment plan

The next step is to create a payment plan that defines the terms and conditions of your recurring payments. A payment plan is a set of rules that specify how much, how often, and how long you will charge your customers for your products or services. You should design your payment plan according to your business model, your target market, and your value proposition. For example, you can offer monthly, quarterly, or annual payments, or you can vary the amount or frequency based on usage or performance. You should also consider offering incentives or discounts for longer or upfront commitments, or flexible options such as pausing or canceling the subscription.

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Ian Kiprono

Senior Java Software Engineer | Building robust, efficient, Java applications using Cloud, Spring, Spring Boot, and Microservice Architecture| Open Source| Avid learner and problem solver.
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Most times the payment plan varies with the type of services that the customer wants. Often, I structure my payments on either a monthly or annual basis. Then I consider payment gateways whose charges, reliability, and security meet this target. At some point, I was using a payment gateway that ended up holding my user's payments for six months just because they weren't expecting such amounts to my account.

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3 Obtain customer consent

The third step is to obtain customer consent for your recurring payments. Customer consent is a legal requirement that ensures that your customers are aware of and agree to your payment plan and your terms and conditions. You should obtain customer consent before you initiate the first payment, and every time you make any changes to the payment plan. You should also provide clear and visible information about your payment plan on your website, your checkout page, and your confirmation email. You should use a checkbox or a button that requires the customer to actively opt in to your recurring payments, and avoid pre-checked boxes or hidden clauses.

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Jakub Piasecki

Developer & Architect | E-Commerce, ambitious CMS, Drupal
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Some of the payment gateways, especially the offsite payment gateway that customer can access on their page or app, will take care of obtaining the consent for you. Nonetheless, you should feature the recurring payments section in your terms and conditions.

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Ian Kiprono

Senior Java Software Engineer | Building robust, efficient, Java applications using Cloud, Spring, Spring Boot, and Microservice Architecture| Open Source| Avid learner and problem solver.
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In my experience, the Payment gateways and the bank involved normally notify the user after they have opted in the recurring payments. Regardless, I explicitly let the users know that they have opted in for recurring payments.

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4 Store customer data

The fourth step is to store customer data securely and efficiently. Customer data includes the personal and financial information that your customers provide when they sign up for your recurring payments, such as their name, email, address, card number, expiration date, and security code. You need to store customer data in order to process future payments without asking for the same information again. However, you also need to protect customer data from unauthorized access or misuse, and comply with the relevant data protection laws, such as the General Data Protection Regulation (GDPR). You should use a secure and encrypted database, and avoid storing sensitive data on your own server. You can also use a tokenization service that replaces customer data with a unique identifier or a token that can only be used by your payment gateway.

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5 Manage payment failures

The fifth step is to manage payment failures effectively and proactively. Payment failures are situations where your payment gateway cannot process or authorize a recurring payment, due to various reasons, such as insufficient funds, expired cards, network errors, or fraud. Payment failures can result in lost revenue, increased costs, and unhappy customers. You should monitor your payment failures and try to resolve them as soon as possible. You can use automated tools that retry failed payments, update expired cards, or notify customers of the issue. You can also use preventive measures, such as sending reminders before the payment date, verifying cards before the first payment, or offering alternative payment methods.

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Jakub Piasecki

Developer & Architect | E-Commerce, ambitious CMS, Drupal
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Each recurring payment gateway will handle failures differently. Sometimes payment retries are handled internally by the payment gateway, sometimes merchant must configure it at their end - either in the e-commerce platform's interface or via an additional plugin. Think about it when you choose a payment gateway because handling payment failures can easily become a very costly process.

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6 Optimize payment performance

The final step is to optimize payment performance and customer retention. Payment performance is a measure of how well your recurring payments are generating revenue and satisfying customers. You should track and analyze your payment performance using key metrics, such as conversion rate, churn rate, average revenue per customer, customer lifetime value, and customer satisfaction. You should use these metrics to identify and address any issues or opportunities for improvement. You should also use strategies to enhance customer retention, such as providing value-added services, engaging with customers, soliciting feedback, or rewarding loyalty.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Siavash Eftekhari

Financial & Economic advisor to Board of Directors at CinnaGen Co.
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Setting up recurring payments for e-commerce businesses is a valuable strategy for consistent revenue and customer loyalty. An essential consideration is selecting a reliable payment gateway that seamlessly integrates with the e-commerce platform. The chosen gateway should prioritize security, offering PCI DSS compliance and fraud protection. Integration capabilities with the e-commerce platform ensure a smooth and efficient payment process. When choosing a payment gateway, factors such as recurring payment features, transparent pricing, and robust fraud prevention measures should be evaluated to optimize the recurring payment process, enhance customer experience, and secure steady revenue streams.

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What is the best way to set up recurring payments for your e-commerce business?

1

2

3

4

5

6

7

1 Choose a payment gateway

2 Create a payment plan

3 Obtain customer consent

4 Store customer data

5 Manage payment failures

6 Optimize payment performance

7 Here’s what else to consider

Payment Systems

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What is the best way to set up recurring payments for your e-commerce business?

1

2

3

4

5

6

7

1 Choose a payment gateway

2 Create a payment plan

3 Obtain customer consent

4 Store customer data

5 Manage payment failures

6 Optimize payment performance

7 Here’s what else to consider

Payment Systems

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