What is Recurring Payments and why is this important? 

So much of our lives is recurring. Including the dollars we pay each month for the services or goods we consume. Often times we wish we could pay multiple ways with multiple payment methods in a fashion that is automated.

In a world of diverse services and fluctuating costs, our monthly invoices may not be fixed but fluctuating fees. Many services or monthly bills fluctuate but still, wouldn’t it be nice to manage these payments in an automated fashion.

There are multiple scenarios of fixed or fluctuating invoices where recurring payments can be leveraged for these monthly or frequently charged services. This means that even though payments may fluctuate monthly, you can see set them up for automated recurring payments.

Examples of invoice types that may leverage recurring payments:

1. Fixed payment amount monthly
2. Fluctuating payment monthly
3. Split payments fixed or fluctuating monthly

Fixed Monthly Payment Amount 

If your payment is a fixed monthly fee, using the payment portal to manage the payment method and amount to be paid each month is ideal. This could be a single payment for a fixed amount each month or multiple payments for a fixed fee amount.

Example: Senior parents living in an assisted living facility. Each month there is a fixed fee invoice that can be set up for recurring payments to be paid in an automated fashion without any effort after the initial payment set up and drafted on the payer’s specified day.

In this example there is a single payer paying on behalf of the entirety of the invoice.

Fluctuating Monthly Payment 

There are expenses that fluctuate monthly that you expect to fluctuate. These invoices can also be set up for recurring payments. In this instance, the payer can set up the max amount approved to pay on their selected date, or to pay the invoice in full. This provides security and protection to the payer’s bank, debit, or credit card while ensuring a seamless payment experience.  

Let’s use the same example, senior living parents living in a retirement home with the addition of a recent hip replacement. This hip replacement required additional services and care offered through the senior living facility. Their anticipated monthly invoice is $5000. However, after the hip replacement, the additional care required has increased the monthly invoice to $7250. In this instance we see that the payer may be used to auto paying the $5000 but will have to account for the remaining $2250 to be paid. The payer will be able to pay the remaining balance with the payment method of their choosing.

After the hip replacement, continued care and assistance will be required. To manage the monthly payment automatically, the payer can continue their recurring payment by making a small tweak to their recurring payment set up.

The change from recurring fixed to recurring fluctuating balances can be managed by leveraging the “Pay in full” or “Max Amount.”

In this example of the senior living facility with increased services due to the hip replacement, the newly anticipated monthly charges are expected to range from an additional $1,000-$3000 monthly. With this understanding, the payer will simply adjust the “Max Amount” to be $8000. This is inclusive of the $5000 base price with the anticipated additional fees up to $3000.

Examples of the recurring fluctuating payment experience over several months.

Month 1:

The automated recurring payment max has already been set to $8000 paid through the payers preferred payment method. The single payment will be made on the selected payment date and paid in full.

Month 2:

In this example, the max amount will not be reached. The total invoice amount is $6525. The total invoice did not reach the max threshold which means the total invoice will be paid in the amount of $6525 with their preferred payment method, on the preferred payment date. This protects the payer from overpaying while giving them the security and convenience to know their invoices will be paid automatically while approving the amount.

Split Payments: Fixed or Fluctuating Monthly

There are often times a mixture of the above examples that the payments may also need to be split. You now know the value of managing fixed recurring payment and fluctuating recurring payments, but what about sharing the expense with others in an automated way.

Examples of where you might see this fluctuating balance that needs to be split by payment method or by number of payers are things like childcare, day cay, assisted living, and many other service industries. In any of these cases fixed or fluctuating, you can easily manage the recurring payment method and amounts in multiple ways.

Senior living parents who have required additional care due to hip replacement, their two children are covering the expenses. Child 1 is paying 40% of the total and Child 2 is paying 60% of the total. Ideally each child can pay their portion in an automated way without additional steps.

In this example, each child can leverage the recurring payment model with the “Percentage” aspect.

Let’s use the same example of the senior living home and fluctuating monthly amount post hip replacement.

Month 1:

In this scenario the children have selected to auto pay their percentage portion of the bill on a specified date monthly. At the time of payment, each invoice will be auto calculated based on the invoice total and the appropriate portion will be paid automatically.

Month 2:

Much like the previous scenario, the appropriate amount will be auto calculated and funds will be pulled on the recurring payment date. No further action on either payer is required.

Value of Recurring Payments

The value of offering recurring payments increases customer satisfaction but it also brings significant cost and time savings to your organization. The recurring model offers a predictable cashflow and ensures continued payment with no effort. Offering Voyage enhances the experience even further. Not only can you offer recurring touchless payments today, you can also offer the payers the ability to manage their payment methods, date, and amount without effort.

In addition to gaining access into management of these payments and invoices, you will also have the ability to locate historical invoices and payments. Voyage is your one stop shop for collecting, generating, and managing payments.