It has come to my attention that many billing solutions like ModernBill, ClientExec and others offer the ability for the client to login and "Pay" their invoices every month, or whatever the billing cycle of their account is.

This mean the clients needs to find their password, login, enter their credit card information and Pay the invoice.

How do you feel this affects your clients?
Are they upset that they need to do this every month?
Will it make them want to switch to a longer term hosting plan to avoid this?

Do you lose clients because of it?

The reason I'm asking is because I'm considering moving from my current payment processor, Paysystems, and their recurring support will be no longer used. I'm trying to grow my hosting business and I feel having my own merchant account will help me more than I would expect in terms of professionalism to clients and having the ability to charge for extras without having the need to setup a "new recurring" payment link.

I will be getting my own merchant account but I'm having a hard time of convincing myself to store CC numbers on my own servers so recurring will work.

My last option means clients will need to login every month (or however often their billing cycle is) to pay an invoice.

Comments and feedback appreciated guys.

I assume with that type of system, you tend to get customers who 'forget' to each month and you end up having to hunt them down. However, it does offer a bit of flexibility if your clients need to change plans or whatnot I guess.

I personally would have it recurring until the customer changes that.

Well there are advantages and disadvantages to both. The monthly is a pain but if you pay your credit card bills online you need to login monthly as well.

The thing I don't like about the subscriptions with 2co and others is it is hard or impossible for me to edit them when a client wants to change plans etc.

If you have to start hunting down a client it is time to suspend them and you will see how fast they turn up and pay. :)

Regards,
Phil

We make clients log in a pay if they are using paypal. Seems to work well and also helps people see the bill before they pay it, so everybody knows what is going on.

I know there are people on both sides of the fence on this. You might find this thread an interesting read.

http://www.webhostingtalk.com/showthread.php?s=&threadid=221891

Vito

You don't need to store cc numbers on your server to have reoccurring transactions. You should look into cdgcommerce.com
You merchant account provider can store the cc numbers for you.

Thanks for the link Vito, very helpful.

Eugene, I'm located in Canada and we have limited merchant accounts. Right now I'm looking into PSIGate.

I use Modernbill for both 2checkout & Paypal.

The client can pay EITHER by cliicking on the invoice or by logging on. It doesn't matter, it's a non issue.

We currently host (last count awhile ago) about 12,000 accounts. We require customers to log in and pay their invoices and it doesn't seem to be a problem at all. Turnover is low. Renewals are almost 100%.

We do offer "recurring" via Paypal subscription - if they wish. ModernBill is setup for that.

We offer 1. credit card payment 2. Paypal payment 3. Paypal automatic payments

--Tina

Oh - dealing with Paypal automatic payments...I notice that about 20% of the payments don't go through after the first month for whatever reason. We've never stored credit card information on our servers, so I don't know if that is typical of auto-payments by credit card. I also would think the amount of chargebacks is higher with auto-pay...since a customer may cancel or think he cancelled and just call the bank to have them stop and reverse payments, rather than contacting you directly.

--Tina

I'm going to be moving away from making clients login and pay each month shortly. I have also had several clients speak up and let me know that they would be much happier just having the monthly charge deducted each month...

If you setup your billing app well enough, you can enable an elaborate system of reminder emails and notices so that you do not lose customers because they forget to pay.

In this case, where they must login, it may also be a good idea to use a monthly billing mode and have clients pay on the first of each month. This way they wouldn't have to remember some odd date in the middle of a month. :D

Guys,

I'm surprised that nobody brought up the psychological side of all of this. A client that's being billed every month is less likely to cancel his account (especially if it's a personal or a hobby site) than if he has to login and manually submit the payment. People simply DON'T like paying - and with a system where they have to log in, you're simply reminding them that you're taking another $10-15 out of their bank account.

I'll even give you an example. I used a service called Vindigo.com for my PDA that costs around $5/mo. I haven't been using the service for about 2 months, but I still let them charge me. I would NOT have submitted the payment if they would make me login and go through the hassle.

Boris

Hi All,

seems interesting this topis!

Simply, if I have to login every month and pay for a service, then I may simply feel lazy and just not to pay. and that's most customers, they just hate it feeling that they are paying.

In case we say, it reduce fraud! then it is not that difficult for a fraudster to store the CC details for th enext month.

I think it'd be a bad thing to make them go through the whole payment hassle each month. Unless you are having chargeback issues or something.. I wouldn't do it.

I would have agreed with many of you regarding the merits of automatic recurring billing. On the surface, it does make sense.

However, one WHT member, AH-Tina, has been in hosting for some years now. And she maintains that she has no problems whatsoever with customers receiving a monthly reminder to login and make their payment. And she also maintains that it cuts down considerably on the possibility of accidental chargebacks since the customer recognizes the charge on the monthly statement.

What do I know? I'm not a full time host. I'm just going by what I read. And when an experienced host speaks, I listen.

Vito

We really haven't had a problem with customers logging in to pay. Turnover rate is pretty low. About 5 or so new signups a day and about 5 - 10 cancellations a month.

--Tina

Originally posted by vito
I would have agreed with many of you regarding the merits of automatic recurring billing. On the surface, it does make sense.

However, one WHT member, AH-Tina, has been in hosting for some years now. And she maintains that she has no problems whatsoever with customers receiving a monthly reminder to login and make their payment. And she also maintains that it cuts down considerably on the possibility of accidental chargebacks since the customer recognizes the charge on the monthly statement.

What do I know? I'm not a full time host. I'm just going by what I read. And when an experienced host speaks, I listen.

Vito

In all fairness though, we've never auto-charged customers...so I have nothing to compare it to.


--Tina

I think requiring them to login each month and pay themselves reduces the # of chargebacks, most definitely.

This is just me speaking, but I like to see the check leave my hand for my rent. My phone bill, credit card bills, car payment, electric bill, all I pay for myself. I'm not a fan (this is coming from a consumer perspective, not a provider perspective) of things being automatically deducted from my account.

We have it setup to default to a manual login method, and only set people up on recurring transactions if they request it. We send out a reminder a week before the bill's due, then another one the day it's due (if payment hasn't been received). For the most part, there aren't any problems.

All that being said, if you can give the consumer the option and let them decide, there's no reason not to.

I appreciate all the great responses everyone, very useful info posted here :)

We have a mixture of both.

All payments are processed via Worldpay and to handle automated recurred billing an addon to the standard Worldpay service is required (called Futurepay).

Before we had Futurepay added, everything was setup whereby the invoices were generated and the client needed to login and pay manually from Modernbill. When Futurepay was added, new signups had automated recurred billing setup by default on signup because it was thought that billing would be better like this and decrease the amount of missed/forgetten payments (which I still think is true). Those still on manual payments who signed up before the addition of Futurepay stayed on manual payments.

Some new clients decide they don't like being billed automatically so ask that the auto recurred billing is cancelled. This is no problem to us as long as they understand that it is their responsibility to remember to pay invoices. We rarely have a problem associated with billing with the clients who chose this route.

Occasionaly there are problems with those still on manual payments forgetting about invoices. The system sends out reminder emails so most get remembered and paid at this point. Those that don't get paid go through the standard reminder and suspension procedure then if they request unsuspension they are asked to setup auto billing to prevent further problems (which I think is fair enough if the client has a habit of forgetting to pay invoices).

some customers may manually pay for several months at a time, not just for a single month.

We use H-Sphere so have automatic recurring CC payments. It also emails them an invoice if they pay via check or paypal, reminding them payment is due. The invoice also contains a payment link if they have their payment type set to paypal, and the paypal IPN or whatever it is then contacts the server to let it know payment was made, and their account is automatically credited.

Gotta love hosting automation :)

There has to be a way to have all the information store safely away and just send out an invoice that has them login and hit submit....What normally stops me from buying stuff online is having to dig out my cc numbers - would help stop that issue...

Let me ask this. For those of you that do you recurring payments, do you still send the client an invoice or not bother because it's taken from their card automatically?

I've found if you invoice them and its already recurring they get confused.

Originally posted by Ramprage
Let me ask this. For those of you that do you recurring payments, do you still send the client an invoice or not bother because it's taken from their card automatically?

I've found if you invoice them and its already recurring they get confused.

The system generates the invoice and lets them know via email. Regardless of whether they are on recurred billing or not, invoices are usually required for their accounting records (and ours).

On the screen where they can pay it using a button there is a big red piece of text stating that it doesn't need to be paid manually if recurred billing is setup (or they signed up after a certain date).

For those of you using Modernbill or any other billing/order system, do you still enter each invoice in an accounting program like QuickBooks or Quicken?

Originally posted by Ramprage
For those of you using Modernbill or any other billing/order system, do you still enter each invoice in an accounting program like QuickBooks or Quicken?

Holy cow...no.

--Tina

Ok so how do you enter data into your accounting program? What accounting program do you use?

I would go on an accounting course to see what your business requirements are first.

I have Modernbill, but here in Britain that would not be enough. In other countries it might be. It all depends. In Britain you would be required to show credit card transaction charges as a loss, therefore you would need book keeping software as well as a billing system. However in other countries it might be different.

It's impossible to know what you do and don't need without knowing what your requirements are.

Well I know modernbill has the ability to export into excel....

I'd only ever use recurring billing - much less hassle for everyone. I know that I personally wouldn't sign up with a host that requires me to pay manually each month.

Best regards,
Matt :)

All of our online transactions are automatically billed each payment period and we've never had any issues with that system.

I would say that 10% of all our clients that receive paper invoices (and are not automatically billed) need a reminder once in a while.