What is the difference between recurring and non-recurring payments?

Recurring payments

Is your business looking for ways to save time, increase payment efficiency and improve cash flow?

Using direct debit for recurring payments is a popular solution. But what about non-recurring payments? Can they be handled in a similar way? In this article, we break down the differences and the benefits of both payment types.

What does recurring payments mean?

A recurring payment means the customer has authorised a business to deduct an agreed amount of money from the customer’s bank account or credit/debit card — not just once — but at agreed intervals of time (weekly, monthly, etc.), and over an agreed period of time.

Read more: How does Direct Debit work?

Examples of recurring payments

People make recurring payments using direct debit for a huge variety of products and services, including:

  • School and education fees

  • Gym, sports, health and fitness memberships and fees

  • Childcare fees

  • Personal training fees

  • Real estate fees

  • Machinery and equipment hire or rental

  • Storage fees

  • Allied health services

  • Donations to charities and nonprofits

  • Other personal or professional services (from accounting to pet services and more)

 

What are the benefits of a recurring payments model?

A recurring revenue model offers many advantages to businesses, such as:

  • Security and reliability

  • Ease of set-up and operation

  • Affordability

  • Better cash flow

  • Fewer problems with late payments and unpaid invoices

  • Flexibility

  • Increased customer retention

What are non-recurring payments?

A non-recurring payment means a one-off transaction. It usually happens just once, and there’s generally just one invoice or bill involved. The amount of money is often larger than the amount for recurring payments. Non-recurring payments can be made via EFTPOS, BPAY and Real Time (online and over the phone).

Examples of non-recurring payments

Non-recurring payments are one-off purchases and encompass an enormous array of products and services, which may include:

  • Set-up costs

  • Machinery, equipment or products

  • Goods and merchandise

  • Extra services not covered by subscriptions or memberships

  • Gift cards or vouchers

  • Tickets for events

  • Competition or exam fees

What are the benefits of a non-recurring payments model?

Non-recurring payments offer many advantages to businesses, too, including:

  • More rapid growth – Since the payment is a one-off, and not divided into instalments, you receive a larger sum of money, giving you more capital to invest in growth.

  • Lower initial costs – Recovery of marketing and sales costs is faster with non-recurring payments. Lead times can be reduced, too.

  • More business flexibility – Some products and services are inherently non-recurring or single-time purchases, such as uniforms, tickets or gift vouchers.

  • More choice of payment options – You can offer customers a wider choice of payment options.

Greater choice of payment options

As we mentioned earlier, you can offer the following options for non-recurring payments:

  • BPAY – This is ideal for larger or one-off transactions such as online purchases or invoice payments. Customers simply activate payment with a mobile or through online banking.

  • EFTPOS – This is best for in-person card transactions. This is a secure, simple and portable payment terminal method that allows you to accept card-present transactions. You can also easily link some machines for centralised reporting. Plus, you can avoid time-consuming manual record updates, thanks to the automatic reconciliation and updating at the end of the day.

  • Real Time Payments – Best suited for instant transactions, this is the recommended option for catch-up, missed or spontaneous payments. Because there’s an instant response to payment, your customers can immediately see whether the payment has gone through. It’s easy to activate, too. You can receive payments on your website through a secure transaction page, over the phone or in person. Alternatively, you can forward a payment link to your customers.

Set up all types of payments with Ezidebit Australia

Whichever payment method is right for you at present, with Ezidebit, you can always add on alternative payment methods later. The payments space is rapidly evolving, and it’s more important than ever to choose a payment solution that delivers fully integrated payment technology. You need a payment product suite that lets you seamlessly unify Direct Debit, BPAY, EFTPOS and Real Time payments together in one place. Ezidebit lets you do all that with simplicity and ease. For more information, contact the Ezidebit team today.

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