Table of Contents
Significance Of Payment Gateway For Subscription-Based Services
Payment gateways are essential infrastructure for any business offering subscription-based services, as they allow customers to easily set up recurring payments without re-entering their payment details each time.
Payment gateways provide a hassle-free experience for customers, as their payment information is securely stored. For businesses, payment gateways ensure reliable payment collection and help retain customers by automating the payment process.
With payment gateways, customers and businesses can focus on the core subscription experience without worrying about payment details. This is why having a robust payment gateway is critical for the success of any subscription-based model.
What Is A Subscription Payment?
Subscription payments are automatic recurring charges collected at regular intervals, usually monthly or yearly, for ongoing access to a service or content. Examples include subscriptions for streaming services, membership sites, software-as-a-service (SaaS), and more.
Setting up subscription payments through a payment gateway allows customers to easily sign up for a service and have their payment method charged periodically without additional manual intervention.
How Does A Payment Gateway Work For Subscription-Based Services?
Let’s look closely at payment gateway work for subscription-based payment services.
1. Authorisation
When customers sign up for a subscription, payment details such as credit card or bank account information are securely submitted to the associated payment gateway. The gateway stores these securely and authorises an initial transaction, such as a trial period or the first month’s payment. This verifies that the payment method is valid.
2. Processing Recurring Payments
On the agreed recurring schedule, such as monthly, the service provider requests the payment gateway to charge the customer’s stored payment method. The gateway then processes this transaction, taking payment and sending funds to the merchant account.
3. Handling Failed Payments
If a stored payment method, such as expired cards, fails when attempting the recurring transaction, the gateway returns a failure response. The service provider is then notified to attempt to collect an updated payment method from the customer to avoid service disruption.
4. Payment Method Updates
Customers can update their stored payment details through the service provider’s website. These changes are then sent to the payment gateway, which stores the latest valid payment information and uses it for future recurring transactions.
Types Of Subscription Payment Methods
Payment gateways allow businesses to accept different popular payment methods for subscriptions:
- Debit cards: Debit cards are the most common means customers use to sign up for subscriptions. Major card brands like Visa, Mastercard, and Rupay are supported.
- Net Banking: Direct debit from a bank account is a convenient option.
Payment gateways integrate with different payment methods to ensure maximum payment flexibility and coverage for subscription businesses. Customers can choose their preferred and most convenient payment option.
Access Seamless Online Payments with NTT DATA Payment Services India
NTT DATA Payment Services India offers powerful yet simple-to-use payment gateways that help businesses accept online recurring payments through a full-featured subscription management system.
NTT DATA Payment Services India offers a complete payment solution to advance both your offline and online businesses. From online payment gateway and POS machines to IVR payments and Bharat QR Scan and Pay, we ensure convenience and safety for all your payments.
Conclusion
Payment gateways play a vital behind-the-scenes role for any subscription-based business by powering automated recurring customer payments. They securely store customer payment details and initiate charges on scheduled due dates, taking care of the entire payment process.
This allows businesses and customers to focus on the core subscription experience without manual intervention. By supporting popular payment methods, payment gateways ensure maximum payment flexibility and global coverage.
Integrating with a robust payment gateway is, therefore, essential for subscription businesses to collect payments efficiently and deliver ongoing value to customers.
FAQs
1. What is a payment gateway?
A payment gateway is a technology system that facilitates payment transactions between a business and its customers. It securely stores customers’ payment details and processes recurring charges on scheduled due dates.
2. How do payment gateways help subscription businesses?
Payment gateways help subscription businesses by automating recurring payments. They securely store customers’ payment details and initiate charges on scheduled due dates without any manual intervention from customers or businesses. This ensures seamless recurring payment collection.
3. What are the main types of payment methods supported?
The main payment methods supported are debit cards and net banking payments. Payment gateways integrate with these popular payment options to offer maximum payment flexibility.
During sign-up, the payment gateway stores the customer’s payment details after authorising an initial transaction, such as a trial period payment. This verifies that the payment method is valid. The gateway then securely stores this information to initiate future recurring charges.
5. What happens if a payment fails?
The payment gateway returns a failure response if a stored payment method expires or fails when a recurring charge is due. The business is then notified to collect an updated payment method from the customer to avoid any service disruption.
