How recurring billing works
At sign-up the customer chooses a plan, agrees to be charged on a schedule and provides a payment method. The method is stored as a token or a direct debit mandate.
On each billing date, a billing run works out the amount, issues an invoice and asks the payment gateway to collect. A success extends the subscription by one period, and a failure starts dunning: retries and reminders.
Kinds of recurring billing
- Fixed: the same amount every period
- Per seat or tiered: the amount follows the plan and the quantity
- Usage-based: the amount follows consumption in the period
- Hybrid: a base fee plus usage
- Trial first: a free or reduced period, then the regular price
- Instalments: a fixed number of charges towards one total
What recurring billing asks of a payments set-up
Stored credentials come first, kept as tokens so that card numbers stay out of the merchant's systems, and kept current when cards are reissued.
Each charge also has to be marked correctly. The customer makes and authenticates the first payment, and the merchant sends the later ones: the entries on merchant-initiated transactions and strong customer authentication set out the rules.
Clear consent and easy cancellation matter as much, because unclear terms come back as disputes.
Recurring billing or recurring payment?
- Recurring payment
- One transaction in the series, seen from the payment side. Recurring billing is the system that schedules and prices the series.
- Instalment plan
- Ends when a fixed total is paid. A subscription runs until cancelled.
Where Recurring billing shows up in a platform
Modules that do the work
- CheckoutA hosted checkout for cards, wallets, bank payments and crypto, routed to the best provider.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.
- LedgerThe double-entry book of record behind every balance, fee and transfer.
- NotificationsEmail, SMS, push and in-app messages in your brand, through the providers you choose.