What is recurring payment and how does this billing model wo

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What is recurring payment and how does this billing model wo

Postby auramehrim » 13 Dec 2022 23:42

Recurrence is a business model that has been increasingly adopted by companies. Becoming a major market trend. As a consumer, you probably subscribe to a product or service in this modality, be it a streaming platform (Netflix and Spotify, for example), software or an online course. To enable this type of service, companies rely on recurring payment , which allows automatic billing according to an established frequency. This provides more practicality for the consumer, in addition to a greater guarantee of revenue and more chances of customer loyalty for the company. Want to deepen your knowledge on the subject? In this article, you will understand what recurring payment is, how it works and what are the advantages of this model for business. Follow! What is recurring payment? Recurring payment is an automatic and periodic billing method for products and services that work through plans, subscriptions or monthly fees, that is, recurring sales.

In practice the consumer chooses the preferred payment method and starts to receive charges automatically in the period and in the established amount, in order to have continuous access to the contracted product or service. Charges are made periodically, with automatic renewals, until the end of the term stipulated in the contract Phone Number List or after the user requests to cancel the plan. Examples of recurring business models In everyday life, there are many businesses that work with the recurrence model. Some classic examples are gym plans, school and course fees, health plans and magazine and newspaper subscriptions. However, with the digitization of the population's consumption habits, more and more services and products have emerged that can be sold on a recurring basis.


It is the case of music movie and game streaming platforms subscription clubs. Online courses SaaS companies ( Software as a Service ), which provide access to a software or application through plans. How does the recurring payment work? Recurring payment works by scheduling future transactions . That is, the company configures so that the billing of its product or service is made at a certain frequency daily, weekly, monthly or yearly during a certain period. In this way, a set number of charges are automatically made to the payment method chosen by the customer, at predetermined intervals. In general, the payment methods available in the recurrence are credit card and bank slip. The advantage of the first method is that the charge is made directly on the consumer's invoice.
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