Do Not Make These 3 Common Errors of Recurring Credit Card Processing

This article explains the three error recurring payments/ recurring credit card processing/ automatic payment. For any good or service, a customer provides the merchant with a payment method, usually a credit or debit card, or information about his bank account, and agrees that it be billed at regular intervals (weekly, monthly, annual, etc.). Many types of business like salon and music,tanning, pet foods and lots more find recurring payment very useful. 

3 common mistakes in processing recurring payments

Prior to teaming up with a card processor experienced in recurring payments, Steve made the following common mistakes made by many other merchants:

1. Do not use an account update service to capture updated card information. 

You may think that once you have a valid credit card registered for your customers’ billing payments, you are ready to execute your transactions successfully for several months or even years. That’s what a lot of people always think of, but you might experience several declines in each billing cycle which means you are losing a lot of money.

Working (partnership) with a commercial service provider offering account update service will help people reduce and recover permissions that have been rejected. This is done by automatic searching for new authorization with credit card information. For example, if a customer’s card expires or is replaced due to fraud, the account update service retrieves the updated card information to complete the transaction. Customers have reissued credit and debit cards at any time for several reasons. An account update service helps reduce the risk of revenue loss when a customer forgets to provide the up-to-date card information to a merchant.

 2. Not having signed a contract/terms of service before billing customers

When offering recurring billing services, it is important to have a direct and complete contract (or a Terms of Service Agreement) with the customer before continuing the relationship. Signed contracts are the cornerstone of simplified billing. They help to establish the trader’s reputation and protect his results.

Signed contracts are particularly important in recurring billing to protect a business in the event of a chargeback. Your contract with the customer must include a clear explanation of how recurring billing works, including when bills are collected, what happens to the customer’s account in case of repeated refusals, and how to terminate the contract.

3. Do not have a solid solution against fraud

As with any type of payment process, fraud represents a risk for merchants. Be sure to mitigate these threats before they occur by implementing payment security measures such as encryption and token creation to protect stored card numbers. In addition, follow best practices to ensure that additional customer contact information is updated, such as email addresses, phone numbers, and mailing addresses. If, for example, your customers receive mail from your company, the last thing you need to worry about is sending items to the wrong address without realizing it. The bottom line of this is an instant loss. 

Do you wish to get more streamlined and detailed information from experts, MerchantScout will provide answers to your question. 

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