Income is good for your business, there’s no doubt. But what’s even better than income?
Any business can realize continuous income by using a subscription pricing model. This generates customer loyalty — as well as steady cash flow. Subscription services that use recurring billing have become popular in the last few years. They provide convenience and regular, predictable deliveries of products. On the other side, they provide recurring revenue for businesses.
Continuity subscription billing refers to an agreement your customer makes with you. When they sign up for your subscription service, they agree to be charged each month, and you agree to provide them with a certain good or service during that month. This type of billing has a lot of fraudulent activities associated with it. There is also a higher incidence of chargebacks because sometimes the customer isn’t aware that a new charge is created every month. These two factors cause banks to consider this type of billing as high risk.
Subscription & Continuity Business Types
Nearly any type of business can consider entering the world of continuity subscription billing. A few types of businesses that often use this type of billing are:
- Membership sites
- Meal Kit sites (HelloFresh, Blue Apron, Home Chef)
- Weight Loss sites (Weight Watchers, Nutrisystem, etc.)
- Magazines and Newspapers
- Subscription Box sites (Harry’s, Ipsy, SitchFix, BarkBox, etc.)
Any type of business can benefit from this type of billing. It is very popular! All you have to do is provide goods or services regularly.
Continuity Subscription Payment Processing
In comparison to more traditional retail operations, businesses that employ a subscription or recurring billing model often have a more difficult time obtaining merchant processing. Why is this? There are two main reasons:
- Chargebacks. When a consumer’s card is charged, they have 180 days to legally dispute the transaction. This often happens when a merchant continues to charge them after a “free trial.”
- Fraud. Using this type of billing, a customer is charged every month until they explicitly cancel it. Unscrupulous businesses sometimes take advantage of a customer’s tendency to forget what they’ve signed up for.
That said, it’s easy to resolve these issues, by partnering with a merchant account provider who specializes in this area.
How Continuity Subscription Businesses Can Better Manage Risks
- Make sure the consumer understands they are subscribing, and they will be billed regularly. Then, require them to confirm that choice. Clear communication builds trust, while also reducing chargebacks.
- Clearly label details of recurring payments, and put them where they will be seen. Hiding important information in the fine print makes a merchant look dishonest, and leaves a customer feeling tricked.
- Put your business contact information in plain sight. When customers know they can simply reach out for a refund, they are less likely to dispute transactions.
- Chargeback mitigation programs alert you to new chargeback activity on your merchant account. They can also resolve disputes with customers before they turn into chargebacks.
- Don’t employ a “sketchy” subscription model. Don’t make your customers explicitly tell you about services they do not want to get, as these are usually suspect.
Finding a Continuity Merchant Account Provider
As you search for the right continuity subscription merchant account provider, there can be a lot to consider. Three main things to look for are:
- Customer Service. When customers are lining up and sales are backing up, the last thing you want to do is suffer through another customer service nightmare.
- Technology Integration. Each business works differently and uses different tools. You don’t want to have to use a tool just because your credit card processor tells you to.
- Low Fees. It’s crucial to choose a provider that has low fees. As your business grows, so too will your fees — and you don’t want those fees costing you hundreds, or even thousands of dollars a month.
Why Use Easy Pay Direct for Continuity Subscription Merchant Account Services
EPD understands the best practices for the success of your business and is designed to make your life easier! With EPD, you don’t have to jump through hoops to get your subscription merchant account working. Our payment solutions are completely customizable, so you can accept payments from customers in any way that works for you. We offer great payment solutions, and our staff is committed to the success of your business.
We pride ourselves on making your life easier and facilitating the growth of businesses across the globe. We have been doing this successfully for years and have helped countless businesses achieve their full potential. Just check out some of our testimonials!
Easy Pay Direct would love to play its part in helping you achieve your goals and service your consumers smoothly. if you’re interested in working with us, you can start your EMAP application below or call us at: (800) 805-4949 | Get Set-up with a Merchant Account »