Recurring Billing Payments

Recurring payments are those for which a cardholder gives permission to automatically charge his or her account on a regular basis. The benefits to the merchant include lowering outstanding receivables, improving cash flow and cutting collections cost and bad debt as well as updating the image of your company and enhancing customer service.

The option to pay recurring bills with a card is eagerly sought by the customers with whom you most want to build relationships - young, well-educated, prosperous individuals who use their cards actively and spend heavily. Research shows that these customers want card payment options for automatic bill payment because they:

In addition to these benefits, special low Interchange rates are available making the cost of accepting recurring credit cards as low as if they were face-to-face "card present" transactions. These emerging market rates apply to governments, schools, utilities, insurance, cable, and pay television.

Requirements for establishing a recurring transaction:
Visa requires the merchants to obtain an order form from the cardholder to establish a recurring payment process. The order form must contain the transaction amount unless the recurring transaction will be for varying amounts, the frequency of the recurring charges, and the duration of time for which the cardholder permission is granted. The order form should also contain the cardholder's signature (written or electronic) authorizing goods or services to be periodically charged to his/her account. The order form may be any of the following; mail order form, recurring transaction form, preauthorized healthcare transaction form, or an e-mail or other electronic record that meets the requirement.

If the request is submitted via the Internet, the merchant must provide a transaction receipt. The receipt should include the frequency and duration of the recurring transaction as agreed by the cardholder and “Recurring Transaction” indicated on the signature line. The merchant must adhere to Internet transaction requirements regarding cardholder data security and receipt requirements.

The merchant should supply notification of how to cancel a recurring payment authorization. If the merchant allows the recurring payment to be established via the Internet, they must also provide a cancellation option electronically.

Recurring transaction prohibitions:
The merchant may not charge finance charges for a recurring transaction. Nor can they deposit the recurring transaction if the cardholder has cancelled, deposit the transaction if the authorization is declined, or submit a partial payment for goods or services purchased in a single transaction. The cardholder account number may not be used for any purpose other than a recurring payment.

Processing recurring transactions:
When submitting a recurring transaction, the “Recurring Payment Indicator” must be included in the authorization record. The Recurring Payments Indicator is supported by Retail @dvantage PC. Authorization is required on all recurring payment transactions. Visa transactions require AVS on the initial transaction. The subsequent Visa transactions do not require AVS unless a change in the cardholder/merchant agreement or the duration of the recurring payment is more than one year apart.

Vantage merchant accounts are compatible with a wide array of terminals, point of sale systems, and software designed to handle recurring billing payments. Retail PC for Windows is a comprehensive, easy-to-use authorization and electronic draft capture system. It is the ideal solution for merchants who use personal computers in their business and are looking to support recurring billing. This user-friendly service provides merchants with a complete set of transaction services and simple "point and click" functionality. A card reader may be attached for "face to face" point of sale transactions as well.

For more information about how to set up automatic card billing including sample authorization forms, contact a Vantage professional.