6 Best Ways to Accept Recurring Payments in 2020

A recurring payment is an electronically processed, automatic payment that repeats according to a preset schedule. Businesses often set up recurring payments to collect fees for memberships, subscriptions, lessons, and services. Customers enjoy the convenience of a set-it-and-forget-it payment option.

To enable automatic repeat payments, a business needs to save a customer’s credit card or bank account information in the business’ payment processing system. The customer must grant permission for both storing the information and for executing the recurring charge. Stored payment data can then be used to process recurring payments automatically.

The six best ways to accept recurring payments are:

• Square: Best overall recurring payment platform for small businesses
• PaySimple: All-in-one online recurring payments, membership, and subscription management
• PayPal: Best recurring payment platform for online businesses
• QuickBooks Payment: Best recurring billing for invoices with ACH payment option
• Stripe: Best for startups managing international, subscription, or in-app sales
• Fattmerchant: Best recurring billing for high-volume businesses

Square: Best Omnichannel Solution for Recurring Payments

Square is a top-rated retail point-of-sale (POS) system that covers every base when it comes to accepting credit cards—including recurring payments. Like everything else with Square, recurring payments are simple to set up and easy to manage long term.

Square’s recurring payments features include:

• Startup and monthly fees: $0
• Recurring payment processing fee: 3.5% plus 15 cents per transaction
• Non-recurring invoice and ecommerce transaction fee: 2.9% + 30 cents per transaction
• Payments accepted: Credit and debit cards and e-wallet payments including Apple Pay and Google Pay
• Cannot accept: ACH payments, e-check, or PayPal (though PayPal can be enabled for Square Online Store)

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How to Accept Recurring Payments With Square

Square’s PCI-compliant payment system allows your customers to store their credit card information as a card on file (CoF) in Square’s secure payments vault. Customers can enter this information via a link from your emailed invoice, or you can enter this on their behalf using your Square POS system or online dashboard.

When creating a new invoice through Square Dashboard, choose whether to send recurring invoices daily, weekly, monthly, or annually and enable automatic payments.

Square’s invoicing function triggers recurring payments. When invoices are run—either individually or in a batch—any CoF customer payments are automatically charged. Customers are then notified of the payment via email with a “paid” invoice receipt.

Set custom reminders for each recurring payment.

The entire process is quick and requires minimal setup or ongoing management. Being invoice-based, Square recurring payments make it easy to process regular payments plus add-on charges as needed. Added fees can be entered as a separate invoice or added to regular recurring charges—whatever fits the billing need.

See whether each invoice has been viewed.

To learn more about Square’s recurring billing software and payment options, read our full Square Invoice review.

PaySimple: Best for Managing Membership and Subscription Payments

PaySimple is more than a payment processor. It’s a full-service platform with particularly strong membership, subscription, order, event, and booking management features. With PaySimple, you can create your own secure online sign-up forms or standalone membership site, accept one-time and recurring payments, and manage it all within PaySimple’s tidy package.

PaySimple’s recurring payment features include:

• Monthly fees: $59.95
• Recurring payment processing fee: Starting at 2.49% per transaction*
• ACH and e-check processing fee: 0.2% + 60 cents per transaction
• Payments accepted: Credit and debit cards, e-wallet payments, ACH, e-check
• Cannot accept: PayPal payments

*PaySimple follows a tiered pricing model, meaning only qualifying charges will be processed at this rate. Non-qualifying charges will be processed at a higher rate, and additional fees can be added on for certain card types.

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How to Accept Recurring Payments With PaySimple

Recurring payments are a built-in feature of PaySimple’s online sales platform. With PaySimple, you get an array of online tools that let you accept and manage all sorts of customer registrations, memberships, and subscriptions. It also provides robust booking management tools, complete with prepayments and deposits.

PaySimple’s software makes it easy to set up custom recurring payments.

In PaySimple, recurring payments can be initiated by your customer via online forms on your PaySimple registration or membership website. Or, you can create them yourself in the PaySimple dashboard on a customer’s behalf using the Manage Recurring Payments tab.

In the PaySimple dashboard, you can set up repeat billing schedules, manually process or refund payments, and manually initiate or cancel subscriber accounts. PaySimple will even prorate monthly billing amounts automatically.

PayPal: Best Recurring Payments for Online Business

PayPal is one of the best ways to accept credit card payments online, and it’s easy to manage online automatic repeat payments via online invoicing, email marketing, and website sales. PayPal recurring payment is an ideal solution for online-based businesses that need to bill customers for online memberships, repeat services, and subscriptions.

PayPal recurring payment features include:

• Monthly fees: $0 – $40 ($10 plus $30 for the needed Virtual Terminal feature)
• Recurring payment processing fee: 2.9% plus 30 cents per transaction
• Payments accepted: PayPal payments, credit and debit cards, e-wallet payments
• Cannot accept: e-check, ACH payments

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How to Accept Recurring Payments With PayPal

There are two main ways to accept recurring payments with PayPal: invoices and subscriptions. Either way, the first step in accepting recurring payments is by opening a free PayPal business account. PayPal also offers other features like tidy online shopping cart integrations. Plus, your per-transaction fee is lower than Square’s and a few others on our list—just 2.9% plus 30 cents per sale. PayPal also provides lower fees for nonprofits, which can be helpful for nonprofits setting up a subscription donation program.

Creating a Subscription in PayPal

To create a subscription, click on “Pay and Get Paid” in your PayPal dashboard. Then, click “Manage Subscriptions.”

First, you’ll need to enter the physical product, digital product, or service you want to create a subscription for. Then, choose how you want the subscription billing cycle to work—subscribers can pay the same rate each cycle or a variable rate based on the quantity of product.

Next, you’ll create a subscription plan description, set pricing, and tax settings. You can also choose to add on a setup fee. Then, choose how you’ll bill customers, payment frequency, and set free trials. After you’re done setting up the product and pricing information, you can add “Subscribe” buttons to product pages, blog posts, and marketing emails.

Setting up PayPal Recurring Invoices

You can create, send, and manage recurring invoices with a PayPal Business account. From the user dashboard, create a new invoice and select a recurring option under the “Frequency” drop-down. You can create and save contacts, products, and services. Plus, you can add your business logo and information for a more professional look.

PayPal’s standard invoicing can also be used to set up recurring payments.

After adding recipients and products, choose whether to allow partial payments and tips. Add any relevant notes (like shipping or return information) and attach files such as work orders or estimates.

Learn more about PayPal’s recurring payment options, including invoicing by reading our PayPal review page.

QuickBooks Online: Best for Recurring ACH Payments

QuickBooks Online users can use QuickBooks Payments’ automatic payments feature to process payments seamlessly within QuickBooks. This feature lets you offer your customers the convenience of automated payments for whatever type of repeat service or purchase you provide—from dance lessons to donation collections to beer-of-the-month club payments.

QuickBooks Online recurring payment features include:

• Payments accepted: Credit and debit cards, ACH, and e-check payments
• Cannot accept: PayPal payments
• Monthly fees: $25+
• Invoiced transaction fees: 2.9% + 25 cents per transaction
• ACH payments: 1% (max $10)

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How to Accept Recurring Payments With QuickBooks

Like the other automatic repeat payment solutions on our list, QuickBooks Payments saves your customers’ payment data in a secure vault. To enable recurring payments in QuickBooks, simply click a button when you create a sales receipt. QuickBooks has a handy tutorial that walks you through the process step by step for both the QuickBooks Online and Desktop versions.

Easily see what scheduled payments have cards on file.

After you create and schedule the initial recurring payment for your customer, QuickBooks has a final step. It prints a customer authorization form for your client to sign. This keeps everything nice and tidy—and keeps the lawyers happy too. Other providers, like Square, PayPal, and Stripe, record authorizations electronically, but QuickBooks also provides a hard copy for your files.

To learn more about QuickBooks Online plan options, read our full QuickBooks review.

Stripe: Best for In-app and International Recurring Payments

Stripe is a leading online payment processing solution and a major competitor of PayPal in general. Like PayPal, Stripe delivers excellent recurring payment options for online subscription sales, online blogs, e-learning memberships, and online invoicing. It even supports mobile app-based services that handle in-app subscription services payments.

Stripe is a developer-friendly solution with open-source code and plenty of toolkits and APIs.

Stripe’s recurring payment features include:

• Monthly fee: $0
• Payment processing fee: 2.9% + 30 cents per transaction
• ACH credit payments: $1
• Recurring payments: Additional 0.5%
• Payments accepted: Credit and debit cards, e-wallet payments, ACH, e-check, plus many international payment methods
• Cannot accept: PayPal payments

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How to Accept Recurring Payments With Stripe

Stripe recurring payments are simple to set up and integrate into most ecommerce platforms and blog sites. In fact, many online subscription box marketplaces like CrateJoy seamlessly integrate with Stripe as their primary payment solution. Setup takes just seconds.

Using Stripe, you can quickly attach subscription payments to most ecommerce platforms using Stripe’s automated integrations. Or, you can create quick pop-up membership or subscription forms that easily embed in your blog or website pages, and even in emails and online apps.

Stripe makes it easy to create custom subscription checkouts.

Like the other online recurring payment solutions on our list, Stripe saves your customer’s payment data in their PCI-compliant virtual vault to ensure security. Plus, Stripe can send e-receipts to notify customers that their automated payment has been successfully processed.

Read our full Stripe review to learn more about the online checkout features.

Fattmerchant: Best for High-Volume Businesses

Fattmerchant is different from the other payment processing providers on this list in that it offers subscription-style payment processing services. With Fattmerchant, you pay more upfront, but if you are a high-volume business, you’ll pay less overall per transaction.

With other payment processing companies, total processing expenses are less predictable because fees are mostly tied to transaction size. With Fattmerchant, you have a good handle on the total you’ll pay for payment processing upfront, and hence, you can predict your expenses more accurately month over month.

Fattmerchant recurring payment features include:

• Monthly fee: $99 – $199 based on plan
• Recurring payment processing fee: 12 – 15 cents per transaction plus direct-cost interchange fees
• Payments accepted: Credit and debit cards, ACH and e-check
• Cannot accept: PayPal payments

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How to Accept Recurring Payments With Fattmerchant

When setting up an invoice in Fattmerchant, you have the option to create a single invoice or a recurring invoice. If you want to set up a recurring payment or invoice, simply navigate to the Advanced Payment option in Fattmerchant’s Omni dashboard. From there, you can enter the price you want to charge and the invoicing frequency schedule.

Set up a recurring payment on Fattmerchant by navigating to the Advanced Payment option in the Omni dashboard and clicking on the Setup Recurring Invoice bar.

Read our full Fattmerchant review to learn why Fattmerchant is one of the best payment providers in the industry.

Who Should Use Recurring Payments?

Invoice-based recurring payments are ideal for:

• Service providers: Lawn care, house cleaning, personal training, and child care can process automatic repeat payments via single or batch invoices.
• Monthly tuition or lesson fees: Fitness clubs, music lesson providers, dance studios, and tutoring businesses can run invoices and automated payments on a monthly basis.
• Subscription services or club sales: Wine-of-the-month clubs and store loyalty programs can use recurring payments to automate monthly club sales or fees.

Online recurring payment solutions are ideal for:

• Subscription box businesses: Subscription box sellers use online websites and marketplaces to sell subscriptions, then automatically run recurring charges for subscribers before shipping scheduled boxes.
• E-learning academies: E-learning businesses make online course content and instruction accessible on an ongoing basis via an online checkout with scheduled recurring payments.
• Membership blogs with restricted content: Informational bloggers can manage access to members-only content using recurring membership payments.
• Online services: Recurring payments are what make all types of online services possible, including software as a service (SaaS), online advertising, gaming products, virtual service providers, and mobile apps.

If you’re selling anything online that auto-renews or requires periodic automatic payments, you’ll need a payment processor that can handle the recurring transactions. The easier you make it for customers to pay you, the better.

What it Costs to Process Recurring Payments

Recurring payment processing fees are typically a small percentage of the transaction total. Each payment provider sets its credit card processing fees and some tack on monthly account fees. For example, Square charges 3.5% plus 15 cents per recurring payment, so a $100 charge costs $3.65 in fees. With Square, that’s all you’ll pay because Square has no other account fees.

Some automatic payment solutions match Square’s no-monthly-fee model, such as Stripe and certain QuickBooks Payments plans. In contrast, Fattmerchant and PaySimple both charge monthly fees for recurring payments but both providers have lower per-transaction fees.

You’ll also want to consider other payment processing services or perks that these providers offer. Value-added benefits, such as Square’s free business management suite or QuickBooks Payments’ seamless integration with QuickBooks, might be the deciding factor.

Bottom Line

If you sell subscriptions, memberships, or services that require regular payments, you’ll need a way to process recurring payments. Affordability and flexibility are the key reasons Square tops our list for the best recurring invoice payment provider. Every business has unique needs, though, so be sure to select a provider that addresses your business requirements.

For startups and small service businesses, we recommend Square for recurring payments. With Square, you can accept payments anywhere you do business—in-person, online, and mobile—plus you get a robust sales and business management platform for free. Sign up for a free account and start accepting recurring payments today.

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