With an increasing number of mobile applications, tech and other businesses going for the subscription-based revenue model, the solution to find an effective recurring payments collection process is a growing need among startups and small businesses. In the e-commerce industry especially, recurring payments collection is multiplying.
Recurring payments are nothing but the subscriptions that a business or service provider collects from customers on a set frequency basis (daily/weekly/monthly/yearly). This can be monthly school fees, gym membership fees, insurance premiums, SaaS and OTT subscriptions, EMI payments, to name a few.
Till recently, people largely made recurring payments through credit cards. But only 3% of Indian bank account owners currently have a credit card, and it is still a big challenge for businesses to tap into this consumer segment. Even with customers who hold credit cards, businesses face many recurring payments challenges, including billing customers, maintaining subscription records, sending reminders to customers, etc.
Growth of recurring payments in India
With the growth of the internet and the adoption of digital payments, recurring payments have now grown to become the buzzword in the town.
Recurring payment models are very common in the market these days. Most SaaS companies have already changed their existing traditional model to a recurring one. Since merchants face many challenges while collecting recurring payments, there is an intense demand for a one-stop solution to these challenges in India’s growing subscription economy.
However, despite switching to one of the most lucrative ways of collecting payments, businesses aren’t able to take full advantage of it because of the following challenges:
- Usage-based billing: For a business that follows the recurring revenue model, it goes without saying that it would find it challenging to incorporate data-based billing that will enable it to bill its customers for their subscription.
- Real-time adjustments: The requirements of customers can change at any point in time. Depending upon the upgrades or downgrades in the plan, a business would need to change prices on a real-time basis. Businesses find it challenging to do this on a real-time basis and send inaccurate bills to customers, resulting in churn.
- Discounts and payments: If a business offers discounts and promotions, managing and tracking discounts redeemed is tedious. Having a recurring billing solution that manages and tracks discounts redeemed can help identify potential additional revenue streams.
- Manage failed and missed payments: There would be instances where customers will forget deadlines or miss the charges due to insufficient funds. It is a big challenge for businesses to track and manage these failed and missed payments manually and, hence, there’s a need for a better solution.
- Safety and Security: It is challenging for businesses to handle customers’ credit card data securely since most recurring payments are made via credit cards. One must ensure a secure connection is available between the customer’s web browser and the server.
UPI AutoPay to change the whole recurring payments Game
To make recurring payments easier for businesses, NPCI recently launched UPI AutoPay. Now every business can let its customers make recurring payments via their UPI supporting application.
Netbanking platforms like Open enables UPI AutoPay for businesses in India to collect recurring payments. Their UPI AutoPay feature has been designed specifically keeping in mind the challenges discussed above.
The Indian subscription market is currently at an aggressive growth stage. Introduction of beneficial features like UPI AutoPay will make companies agile and efficient — allowing them to attract, package, price, sell and bill seamlessly. That makes it a win-win for both businesses and their customers.