From subscription-based clothing services for consumers to software products for businesses, the recurring billing business model saw a resurgence last year as organizations sought the flexibility of the business model to stay in business.
Yet for B2B organizations that need to deliver a streamlined, hassle-free billing presentation and recurring payment processing experience to their end customers, the entire accounts receivable workflow can be disorganized without proper automation.
In a recent interview with PYMNTS, Abrams discussed the roles that application programming interfaces (APIs), data integration, and automation technology can play in helping businesses adopt a recurring billing revenue model. and overcome some of the most important challenges in improving the payment experience – for payee and payor.
Management of ACH transactions
For years, card payments have been the payment method of choice for recurring payments. For consumers, cards can drive efficiency and security, allowing payers to provide card details to automate recurring transactions without having to share sensitive data.
Businesses have started to follow suit, particularly with their growing list of user-friendly software solutions for remote working, as organizations embrace commercial card products for B2B payments.
Yet a recent shift among card networks has caused companies to charge on a recurring basis to rethink the card acceptance strategy.
“Credit card interchange rates went up last July,” Abrams said. “The cost of using a credit card as a method of payment has increased for the merchant. “
In a unique shift to B2B payments, organizations receiving recurring invoices have become more comfortable providing bank details to support repeated and automated ACH transactions. Abrams noted that because business customers can also go through the pain of expensive card acceptance – an experience consumers don’t face – there was less resistance in the B2B space for companies to deliver cards. bank details.
Additionally, he said, business customers also recognized that by enabling ACH transactions, they would not have to absorb the transfer fees that some merchants may charge to accept cards.
Facilitate the friction of recurring B2B payments with data
However, digitizing and optimizing the transaction method itself is only one piece of the puzzle when it comes to recurring transactions.
For many B2B merchants in particular, it is difficult to find payment service providers capable of supporting payment acceptance.
“When you apply for a payment account, it goes through an enrollment process that’s no different than what you’re trying to get for a credit card,” Abrams explained.
For new businesses that sell services and not products, this subscription can be a barrier to accepting payments, as there is no physical good that a customer can return if they request a refund.
Yet, with the increase in recurring billing and digital business models, it is imperative for organizations to have quick and seamless access to payment acceptance technology and support a seamless onboarding experience. friction.
As part of its pursuit of such capabilities, Recur360 recently announced a partnership with Paya, a collaboration that Abrams says also supports the need for more robust transaction data to enable integration, workflow automation, reporting and reconciliation. Combined with existing Recur360 tools to help QuickBooks users invoice and accept payments on a recurring basis, the team can further support businesses in a variety of product and service categories to enable recurring transactions.
“Our goal with our technology is to automate the entire invoice generation, payment processing, customer notification, and accounting and reconciliation experience,” said Abrams. “The more automated it is, the more people can focus on running their business as a merchant … and the better the API, the better the automation, the better the experience.”