My Merchant Account Blog

Relying on Recurring Billing

Friday, April 17, 2009

A recurring monthly payment from customers can be a good source of income.  There are thousands of businesses that could thrive on using an electronic payment gateway to do recurring billing for them.  The electronic payment gateway would store the consumer's credit card number for you and complete the transaction at a set interval that you determine.

LinkPoint / First Data Global Gateway

The LinkPoint Gateway (also known as YourPay, but now known as the First Data Global Gateway) has their feature that is called periodic billing.  Through their API, you can set up a recurring monthly payment.  By doing this, you do not need to worry about storing credit card numbers and a possible breach.  You also save the Address Verification Service (AVS) fee on each recurring transaction, since the gateway has performed the service already. 

The LinkPoint Gateway however is somewhat limiting on its features.  For example, if the recurring transaction fails the next month, you are sent an email.  Unfortunately, it is then up to you to either contact the consumer to get a new credit card and possibly suspend the consumer's account.  However, you can also set up the recurring transaction to try for a couple of days - just in case the consumer was close to his limit and a payment was received to the card association.  Keep in mind though, each transaction will cost - a transaction fee, and this is usually $.15 - $.30, depending on your monthly volume and transactions.  On the plus side, the periodic billing feature is free and is available to all merchants that use the LinkPoint / First Data Global Gateway.

Quantum Gateway

The Quantum Electronic Payment Gateway is a fairly new product from CDG Commerce.  The gateway seems to pick up where a lot of the electronic payment gateways stop when it comes to recurring billing.  With their API, you can store the customer's credit card number on Quantum's secure web server and bill the credit card at a later time.  This comes as the e-commerce industry is trying to be more secure.

Developers can also apply for a test account to help mimic real world transactions.  For any new business that is considering a safe and secure method for securing credit card numbers, they should look at the Quantum Gateway.  However, this does not make you exempt from the Payment Card Industry Data Security Standard (PCI DSS).  With the API from the Quantum Gateway, there is no need for merchants to store the credit card number on their web server - all the information needed for the transaction is stored securely in the Quantum Vault.

The other electronic payment gateways and Internet Payment Service Providers (IPSPs) all offer some version of recurring billing but I don't think you will find one that is comparable to the Quantum Gateway.  As the Internet grows and more business models are online, most of the electronic payment gateways have grown stagnant as far as development.

Comments

Michael McCarty said...

Corey, your blog extremely helpful. I am a small business that does marketing and offers merchant services. Your blog has given me great insight on the different payment gateways. I am hoping you might be able to help me with a question. I am needing to switch a merchant account that use YourPay and wants to stay with them. How would I switch the old merchant account over the a new one. I tried calling YourPay but it is very hard to get someone to help me with this question. thanks for any help you can offer.

9/14/2009

Charles said...

I would recommend the
href="http://www.milehighmerchantaccounts.com/quantum-gateway" title="Quantum Gateway">Quantum Gateway. YourPay was a scaled down version of LinkPoint that Chase was using before Chase separated from First Data.



It would be a little of a hassle, but Quantum has a lot more features for recurring billing than YourPay / LinkPoint / First Data Global Gateway.



If you need to
stay with YourPay, once you get set up with a merchant account provider that is
compatible with this electronic payment gateway, the merchant account provider
will give you a merchant identification number, a TID, and a MID - this
information can then be given to the YourPay gateway.

12/24/2009

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