More and more businesses today comprise of continuity subscription merchants. That’s true whether those subscription merchants cater to consumers or other companies.
Every product or service you look at has incorporated the continuity subscription model. It is no longer for a gym membership or Netflix. Continuity subscription merchants now offer anything ranging from chocolates, shaving supplies, office software like Microsoft Office or Zoom, to a wide assortment of specialty services curated to attract all types of customers.
As a result of these business trends, we look at continuity subscription merchants’ accounts, the various businesses using them, their benefits, and how to obtain a suitable subscription payment processor.
What is a Continuity/Subscription Merchants Account?
So what are continuity subscription merchants accounts? These are merchant accounts for businesses that offer a product or service with ongoing or recurring payments for those products or services. Customers always have an endless, uninterrupted supply of whatever they need with this offering.
Businesses’ latest foray into a new form of brand and product strategy is to pivot the consumer experience from that based on transactions to that of the customer relationship. The effect is building loyalty and trust, increasing the CLV by offering a flywheel of other products and services, all with minimal customer acquisition costs. Simply put, rather than a one-time purchase, continuity subscription merchants are starting to lock in customers for an extended period for an ongoing offering.
How are subscription payment processor services handled?
The subscription payment processor services are handled as recurring payments of periodic automated charges to the customer’s bank account, credit or debit card, or digital wallet. Regardless of the payment method used, the subscription merchant needs the customer account information and their permission for an open-ended recurring payment to be processed, i.e., recurring payment no end date.
Various subscription payment processor services handling options include the following:
Credit cards: the customer would have to grant permission of the card as a ‘card on file,’ authorizing the merchant permission to process the first and all future subscription payments.
Payment Gateway: This can be accomplished through a 3rd-party payment gateway, or one offered as an integrated service from your payment processor.
Accounting Software: Many subscription merchants use their accounting software, such as QuickBooks, to process recurring payments. This is done via an option to input a sales receipt to process a credit card payment and then simply save it by marking it as “Make Recurring.” This will allow the merchant to set a payment schedule using the stored credit card information.
Automated Clearing House (ACH): One of the most convenient and cost-effective forms of handling subscription payment processor services. ACH is a fund transfer system that banks use for low-dollar transactions within the US. The subscription payment processor can help set up merchants billing customers via an automated recurring ACH payment through either their debit or credit cards.
A host of payment service providers (PSP), also known as payment aggregators, such as Block and PayPal, offer subscription payment processor services. It’s also available from platforms such as Shopify and digital wallet platforms such as Braintree.
The benefits of subscription merchants’ business models
Of course, the subscription merchant’s business model has numerous advantages. Such businesses have more predictability of income streams, resulting in a more reliable source of cash flow so business owners can focus on the company. The model also tests customer loyalty; if they are willing to shell out money on an ongoing basis, the product has stickiness attracting the attention of investors and capital to scale such businesses quickly.
Such business models, by default, are extending the customer lifecycle and increasing the customer lifetime value. By leveraging the existing trust and loyalty, businesses offer several other products and services with almost no additional customer acquisition costs.
Finally, subscription merchants are payments up front, no more tracking open invoices, chasing receivables, or having write-off bad debts.
How to apply for a continuity subscription merchants account?
So how do you get started with a continuity subscription merchants account? The process is simple enough. Start by applying for a continuity subscription merchants account. Gather all the necessary supporting documents, the list of which you can quickly obtain from the subscription payment processor’s website.
After tha, merchants go through the underwriting process, where merchants provide details about their business, bank statements, and payment processing history. These details are essential as they determine the payment processing rates.
Although a continuity subscription is an excellent service and a fast-growing business model, the service can be as good as the subscription payment processor a merchant decides to partner with. Merchants need to review the online forums carefully, and the Better Business Bureau website for the complaints merchants have about any payment processor you consider.
Subscription merchants should ensure that they work with a subscription payment processor with competitive rates, no hidden fees, and a history of providing a versatile API utilizing the latest security protocols for subscription services.
Seeing how rampant subscription merchants are in today’s business environment, there is growing interest in adopting the business model. The service model is no longer limited to gyms and newspapers and is being seriously considered for adoption for many business types. Almost all new entrepreneurs want to incorporate a continuity subscription merchants’ business model into their plan, regardless of whether you’re B2B or B2C.
Today, a website visitor answers a few questions of their preferences and efficiently sends a monthly subscription box of widgets. The benefits of such plans cannot be denied and have piqued the interest of investors and venture capitalists worldwide.