My experience

Within PayPal and Braintree I saw huge growth (and more opportunity than was exploited) of our recurring payment functionality (and CPA).

Partnering with magazine warehousing & distribution companies was a proof of concept here, that as well as obvious opportunities to work with global players including Spotify, Xbox (MS), and PlayStation – creating a new vision for digital goods sales.

Decision makers needed to take heed in 2009 – and to some extend are still behind the time, that there was a ‘high street revolution’ – where companies like Graze, HelloFresh and ‘Clothing boxes’ delivery business were bringing the high street to the door, the target market list expanded to:

  • Everyday spend (food shopping)
  • Insurances and financial products
  • Physical publications
  • Donations / charity
  • Memberships (every sector)
    • The list goes on

What’s the recurring / subscription opportunity?

Truly massive – a solution which specialises, has an improved, evolving, innovating, platform, flexible pricing, less ‘brand fear’ and earlier SEPA adoption – can dominate in the EU market, and beyond.

Recurring payments – a lack of trust (in the UK)

NOTE: I do not see these as major issues in Nordics or much of Europe – but are still relevant to business development thinking


Recurring payments give the control to the organisation you are paying.  Until 2009, only the payee was able to cancel the payment, so even if you cancelled a magazine subscription it would have been up to that company to cancel the regular payment from your card.

While most reputable companies would cancel the payment immediately, there were many that didn’t, meaning you could go on paying for a product or service you no longer received. This means there is trust to build – particularly in the UK.


Another problem is that the recurring payments were often variable, so a company could raise the value or the frequency of payments without you knowing. Setting up a CPA with an online and/or overseas company carried heightened risk. Some firms refused to acknowledge the cancellation requests, which could result in a long struggle to put an end to the payments.

What consumer knows or cares that: “Officially known as a continuous payment authority (CPA), a recurring payment (SEPA or otherwhise) lets consumers allow regular payments to be taken from their credit or debit card, in the same way that direct debits are taken from their bank accounts.” Or “What is SEPA”?

Aside from the legal T&Cs a simple explanation of a recurring payment (SEPA and CPA) and the rights of the consumer will satisfy today’s tech-savvy consumers.

Recurring payments – overcoming the issues

Since before 2010, consumers had the right to cancel a CPA themselves. This means the credit card provider with whom the CPA was established, would be taken out of the equation, leaving them to resolve any outstanding payments with the company directly.

Financial Services Authority (FSA) guidance is clear. ‘In most cases, regular payments can be cancelled by telling the company taking the payments. However, you have the right to cancel them directly with your bank or card issuer by telling it that you have stopped permission for the payments,’ it states.

Since RPs are typically used for things like subscriptions or memberships to magazines and organisations like the AA, for example. In some cases, you may think you are making a one-off payment but actually signing up to a recurring agreement (CPA or post 2012 SEPA) – repuitable companies using the service can only be a good thing however.

Companies such as Netflix and Spotify seem to make it quite hard to cancel their CPA / recurring billing – building trust means explaining clearly what you are entering into at the merchant / client level. (Why can I just click CANCEL EVERYTHING)

Merchant benefits

Offering recurring payments is a great way to increase customer retention, improve checkout experience and grow customer loyalty – and at the same time automate your payment processing and reduce operating costs.

Often, recurring billing is associated with debit orders or direct debits.  However, SEPA, credit and debit card recurring billing provides the same monthly collection conveniences plus more such as real-time authorizations, faster funding and global sales reach.

Cardholders are also looking to pay with card for known benefits such as loyalty reward points, interest free payment terms, trusted brand (Visa / MasterCard) and ease of payment process.

In the case of SEPA – a loyalty partner is important, and would be a key part of a channel strategy – if a card scheme is not involved.

Key benefits

  • Flexible payment timetables
  • Satisfy demand for payment options
  • Increase enrolment (ongoing)
  • Reduce delinquencies
  • Improved forecasting and cash flow
  • Improve collections (with multiple and ‘retry’ funding option
  • Build customer loyalty, retention and improve customer service


The science bit… what a merchant would need to do

  1. Select a recurring billing solution

Select an application or interface that helps you to manage clients and recurring card billing. This can normally either be done from a payment gateway or a subscription based software package.

  1. Introduce the recurring payment option to your customers

Your customers MUST understand what a recurring payment is you will want to inform them that the payment will be recurring and to notify them of the set timing, frequency and amount.

  1. Set timing, frequency and amount

In order to set up a recurring payment, you will need to include certain information such as:

  • Schedule start date
  • Frequency
  • End Date?
  • First payment amount
  • Subsequent payment amounts
  • Pre-notifications
  1. Compliance & capture

In order to process a recurring payment, the card / SEPA information must to be captured.

We can eliminate your worries on PCI compliance, whilst highly recommended that you do not store card information in your environment – environments such as hotels this may be a requirement.  Tokenisation or your own certifications are ways around this.