I'm getting pretty sick of it now - I sign up for an account, and I set up payment for an account when I order it.

So why do so many webhosts insist on sending myself bills afterwards, claiming that they have not received monies - simply because they couldn't be bothered to set up recurring billing when they actually set up the account?

ModernBill users are the worst - I make my payment, and then sometime later will be told no payment was actually made (I just went through the motions for fun, did I?) and that I have to go chasing after the web merchant and login into their modernbill software panel and figure my way around to the billing payment option - and hope this time that the webhost allows payment.

Personally, I'm getting pretty sick of it - I administer a lot of webhosting accounts across a lot of different providers. It adds very unnecessarily to me administration costs when webhosts demand that I have to chase them to make payment, even though I've already been through the motions.

From now on, every account I get like that will be cancelled. I expect a more professional level of service, than dealing with webhosts who cannot even set up a proper billing system.

This is an interesting post.

Personally I DON'T auto-bill or setup reoccurring billing for customers. We made this decision around 1998 following the advise of our Merchant provider. The result is about 2 charge-backs per year since then.

Our customers receive an e-mail invoice according to their billing cycle, (mo,qtr,yearly). They are free to mail in a check or log-in and pay by credit card. Each time making a payment is their choice. Not doing it this way leaves me open to a request charge-back upto 6 months, a risk I simply can't afford.

There are more horror stories about hosts that do re-occuring billing NOT stopping the transactions, then customers not wanting to pay their bill manually. (Note: Not all host abuse re-occuring billing).

I agree that you as a customer have the right to pick a host that has a billing method that suits your needs, but to say that hosts elect for whatever reason to not do re-occuring billing don't have their act together is a bit harsh don't you think?

Bob

As someone who recently acquired a host that uses Modernbill, I can only say how horrible it is to use and that I am looking for a much more straightforward alternative. I believe that accepting payments from several sources (Worldpay, Paypal, Cheque etc) causes most problems and as such simplifying that would be the first thing.

May I recommend you look at H-Sphere hosts. You just simply cannot have this problem - whether the host has activated recurring billing or not.

The entire system is integrated - you will get an invoice/term - the invoice will either indicate that it has been paid automatically, or that payment is due - log into your control panel, make the payment and a receipt is generated. Both the customer and the host are dealing with the same billing system, so, theres no way for their to be confusion around whether the invoice was paid..

Hope this helps...

I can't imagine not setting billing to recurring. The nightmare involved in invoicing each month would have me losing hair - well more hair than I do already. :D

Originally posted by akashik
I can't imagine not setting billing to recurring. The nightmare involved in invoicing each month would have me losing hair - well more hair than I do already. :D
Agreed. Recurring billing is a great feature for a host when managed correctly. The less a client has to think about making a payment month after month, the better. :)

- John C.

I don;t at all believe that recurring billing is going to kill chargebacks - 1998 on the internet is simply very different from 2004 on the internet.

And in 2004 when I pay for services, I expect it to be simply paid.

It's completely ridiculous that some online merchants expect me to chase them after making a payment. I pay - that should be the end of it. When I sign up with my credit card details online, I expect them to be actually used for something.

PS - What is even more infuriating is when webhosts send out e-mails with "don't reply". on their billing. Talk about trying to set up blocks between merchant and customer.

A lot of webhosts simply don't know how to set this sort of stuff up securely and such so they don't. And those are the hosts you need to watch out for. As for the no-reply thing they should have at least have it reply back to their billing/accounting department so if you have any questions it could properly be taken care of. You shouldn't have to chase after the host to make a payment your right. If they don't have re-occuring there should be a simply function to just make the payment. But some hosts don't like to store credit card information either. But I can understand why your so upset. Goodluck on your future ventures.

Originally posted by I, Brian
PS - What is even more infuriating is when webhosts send out e-mails with "don't reply". on their billing. Talk about trying to set up blocks between merchant and customer.

I agree with you - I'm trying to sort out an inherited mess so that replies to invoices get handled by the support desk, rather than the catch-all.

Why some hosts insist on using lots of email addresses to bewilder their customers, I just don't know.

Originally posted by I, Brian
I don;t at all believe that recurring billing is going to kill chargebacks - 1998 on the internet is simply very different from 2004 on the internet.


I think this is a VERY accurate statement - However, merchant providers still havent caught onto this fact and deal with recurring, subsciption, internet based businesses VERY harshly - particularly here in Canada.

Having said this however, the total cost of running a web hosting business is significantly less if you utilize recurring billing features - which is why most hosts will bite the bullet on these fees and pay the increased rates.

Any good host has learned how to minimize their risk exposure, and within 1-3 years is able to negotiate more favourable rates based on their processing history..

A lot of webhosts simply don't know how to set this sort of stuff up securely and such so they don't.

That's right, when I started my biz this was one of my primary concerns. Thankfully to my merchant account provider, they have an option to use their secure server (just like PayPal does) for ordering, so I usually have customers redirected to the merchant's secure server where they leave their credit card and other private stuff. What sits on my server is only the amount and recurrence terms (monthly, yearly, quarterly, etc.), their name and e-mail/phone, in case I need to get in touch with them. This lowers the risk, I guess...

Here is my two cents on recurring billing - if there is a proper level of fraud screening on the signup side and the recurring billing side is handled with responsive customer service in the event of cancellations... then it is the ideal way to build your business from both a customer satisfaction & a cashflow perspective.

I have seen Web hosts who process well in excess of six-digit volumes per month and who have few or no chargebacks and they are using automated recurring billing systems of one type or another.

On the flip side, I've seen smaller Web hosts who don't carefully screen their orders or who don't respond quickly to cancellation requests or refunds in the event of a duplicate billing - and find themselves hit with a bunch of chargebacks.

The two most common types of chargebacks that we see from Web hosts on the merchant processing level are fraud-related chargebacks ("unauthorized") and billing-related chargebacks (i.e. "recurring transaction not cancelled", "duplicate billing", etc.)

If you work to eliminate the first through fraud scrubbing and order/phone verifications and have a good cancellation process in place to avoid the second - you'll be ahead of the game and readily able to use a fully automated recurring billing system.