How does a merchant account handle payments for recurring subscription services?

When it comes to handling payments for recurring subscription services, merchants typically have a few options:

1. Payment Gateway with Recurring Billing: Merchants can integrate a payment gateway that supports recurring billing into their website or application. This allows them to securely store customer payment details, such as credit card or bank account information, and initiate automatic recurring charges at predefined intervals (e.g., monthly, quarterly, annually). Indian payment gateway providers like Razorpay, PayU, and Instamojo offer recurring billing options suitable for subscriptionbased businesses.

2. UPI AutoPay: Unified Payments Interface (UPI) AutoPay is a feature introduced by the National Payments Corporation of India (NPCI) that allows customers to authorize recurring payments from their bank accounts. Merchants can leverage UPI AutoPay to set up recurring subscription services. Customers need to provide their consent and authenticate the initial payment, after which subsequent payments are processed automatically. This option provides convenience to customers and reduces dependency on cardbased payments.

3. Ecommerce Platforms: If you sell your subscription services through ecommerce platforms like Shopify, WooCommerce, or Magento, they often provide builtin features or plugins/extensions for managing recurring payments. These platforms integrate with payment gateways and handle recurring billing on your behalf, simplifying the payment process.

4. Direct Debit: Merchants can also set up direct debit facilities with partner banks or authorized payment service providers. This allows them to collect recurring payments directly from customers' bank accounts. Typically, this option requires additional documentation and agreements with the respective bank or service provider.

5. Wallets and Prepaid Instruments: Some digital wallets, such as Paytm, PhonePe, or MobiKwik, offer features that allow merchants to set up recurring payments for subscription services. Customers can link their wallets to the subscription and authorize automatic deductions at regular intervals. Additionally, prepaid instruments like virtual cards or prepaid wallets can be utilized for recurring payments.

When selecting a payment solution for recurring subscription services, it is important to consider factors such as transaction fees, security, reliability, customer experience, and compatibility with your business model. It is recommended to consult with payment gateway providers, banks, or relevant service providers to understand their offerings and choose the most suitable option for your business.