Recurring payment is also known as autopay. It brings endless flexibility in the field of online payment. People in the 21st century are using online payment modes. Well, these modes are considered as traditional payment methods nowadays. The recurring payment is quite different from these modes. It comes with some innovative features. In the case of a recurring payment, the customers will have to provide permission to the merchants. The merchants will deduct the amount from the bank account of the customer every month. Yes, in the case of a recurring payment, the consumers will not have to pay the entire amount while purchasing the product.
The transaction amount is divided in several parts. Each month, merchant deducts a certain amount from the customer’s bank account. Well, the customer will not have to think about the late fee as the entire payment system is automatic. The merchant deducts the amount from the bank account directly. Well, it will continue until the customer retracts the recurring payment.
Standing in the technologically flourished era, it is very important to understand the difference between traditional payment methods and recurring payment method. If you are someone who loves online shopping, you must know it. Unfortunately, there are many online shoppers who do not know the difference between these two. Therefore, we have come up with a brief comparison between these two. So, don’t miss to go through the following points:
Benefits For The Merchant
Predictable Cash Flow
If the customer starts accepting recurring payments, the cash flow will be increased. Well, if we talk about the other traditional digital methods, they are also effective. But, in the case of such payment, the merchant will know how much money is coming in his business account. Depending upon this, the merchant will be able to elevate his or her business to the next level.
Less Processing Fees
If we talk about the paper-based checks, the merchants will have to pay additional processing fees. But, in the case of such payment, there is no such additional processing fee. Ultimately, merchants can increase their profit margins if they start accepting recurring payments.
Benefits For The Consumers
Zero Late Fees
Well, the recurring payment is a kind of automatic payment and therefore, the customers will not have to log into their accounts to pay every month. The deduction will be automatic. As a result, the customers will not have to pay any late fees.
If we compare the recurring payment with the traditional payment methods, you will realize that it is faster and more reliable. Therefore, customers give more preference to it.
So, this is the comparison between recurring payment and traditional payment.