In our final part of our three-part series on what membership organizations should know about recurring payments, we look at how to qualify for Recurring Billing Interchange.
Technical Requirements: How to Qualify for Recurring Billing Interchange
We should start by clarifying that recurring payments don't automatically get lower interchange rates. If you just send a credit card transaction each month to your payment processor for the same amount it won't qualify for the special pricing, because they'll have no way to know that it was a recurring payment. To them, it would appear to them as a bunch of 1-off transactions.
If you are building your own custom integration to a payment processor, you must find out if there is a recurring billing flag or identifier so that you can pass it with the transaction. You must speak to your payment processor to find out how to do this. In fact, if you do recurring payments and do not yet have a payment processor, you should start by making sure your processor agrees to:
- Give you interchange plus pricing
- Confirm they have the capability to receive a recurring billing flag
- Allow you to pass the recurring billing flag so that your transactions qualify for the lower interchange rates.
Without meaning to make this discussion overly complicated, it should also be pointed out that we are referring to your "payment processor" in this discussion, but more specifically your
If the prospect of building your own integration into a payment processor is too complex, you can use a pre-existing platform, such as
The good news is that it's certainly achievable if you are aware of the issues, take the time to ask the questions, and select partners that will support your business through the process to make sure it's done correctly.
Dealing with expired credit cards, technical hiccups, and other issues
It is much easier to make a sale to an existing customer than it is to convert a cold prospect to a customer. Recurring billing is a frictionless way to generate additional revenue from your existing customer base. It's unfortunate when problems occur to upset a finely tuned customer list.
In many cases, it's not your fault or even your customers fault. For example, a customer may have had their card compromised and it will have been re-issued by the bank. If this happens, the replacement card will have a different card number and expiry date. This would cause your recurring payment to fail.
Or, it could be as simple as your customers hard having expired, and a new card sent out with a new expiry date.
Fortunately, the card brands have addressed this issue through the Card Updater service which is supported by both
CRM Dynamics Offers a Recurring Billing Management Platform
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