What is a Recurring Transaction?
Many companies that work on a subscription model may ask, "what is a recurring transaction?". The recurring purchase meaning refers to automatic charging by a merchant without the direct action of the client and the mandatory input of payment data each time. Once set, recurrent transactions are executed automatically after a certain period (e.g., every month, every week, 25th of every month, etc.).
Recurrent transactions are a convenient and popular tool among businesses that charge for their goods or services regularly. This includes online courses, mobile apps, hosting providers, online magazines, OTT services, charities, and many other business areas.
Recurring debit card transactions increase the conversion rate, as the funds are debited automatically, and the client does not need to be reminded of the payment. In case of an unsuccessful transaction, the provider will retry to charge funds after some time and may continue to do so until the transaction is completed.
If the charging is not completed even after several attempts, the provider will send a reminder of the need for payment to the cardholder's email. This contributes to an increase in the percentage of customer retention. If the client is really interested in a particular product, they will replenish the bank card or specify new payment details.