Recurring billing
Recurring billing is a payment model where merchants automatically charge customers at predetermined intervals for ongoing goods or services. After obtaining initial authorization and payment details, the merchant processes charges automatically without requiring additional permission for each transaction.
Customers provide payment information and consent once during signup. The merchant then charges the payment method automatically according to the agreed schedule—weekly, monthly, annually, or custom intervals.
Common uses:
- Subscription services (streaming, software, memberships)
- Utilities (electricity, water, internet)
- Regular services (gym memberships, insurance)
- Consumables (meal kits, supplement deliveries)
Billing models:
- Fixed - same amount each period (e.g., $9.99/month)
- Variable - amount changes based on usage or tier changes
- Metered - based on consumption (utilities, API calls)
- Quantity-based - priced per unit or seat
Benefits for customers:
Convenience, no missed payments, potential discounts, automatic service continuation.
Convenience, no missed payments, potential discounts, automatic service continuation.
Benefits for merchants:
Predictable revenue, reduced payment collection effort, lower accounts receivable risk, improved cash flow forecasting.
Predictable revenue, reduced payment collection effort, lower accounts receivable risk, improved cash flow forecasting.
Some merchants require recurring billing for their services, while others offer it as an optional convenience, sometimes with pricing incentives.