Credit Card VS. Digital Wallet – Which Payment Method Works Best For Recurring Billing Businesses?
Subscription businesses, cross-border business dealings, and eCommerce have increased the need for new and efficient online payment methods. Many tech companies worked to cater to this need of different enterprises in the digital arena. And today, we see there are hundreds of online payment methods.
But how many of them are preferred by online customers?
How many of them are secure for online payments and transactions?
You can count them on your fingertips, and among these reliable payment methods these two are most popular:
- Digital wallets
- Credit cards
In the subscription business, customers come to you recurrently. You need to offer them the best experience every time they come, and to offer them the best customer experience, it is mandatory to make the subscription payment process as smooth as you can.
There are millions of people in the digital world using digital wallets and credit cards as their payment methods. Here, we will discuss various benefits of using these payment methods so that you will be able to decide which one you can adopt for subscription payments:
Recurring Payment through Digital Wallets
Digital wallets allow customers to share their information for the transaction. This information is saved for the payment of the next subscription fee. Some of the widely used digital wallets are PayPal, Amazon Pay, and GooglePay.
Now we take you towards the reasons that make digital cards ideal payment methods for recurring payments:
– Security of Customer Information
One of the primary reasons for preferring digital cards for the subscription fee payment is the freedom from the annoying process of entering the huge card number and security code. If you are using a digital card, you can establish your digital account by using your email address and your password. The customer information is never directly passed across platforms rather it is first tokenized—ensuring information security.
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In case the customer has a high-tech smartphone, the transaction becomes more feasible. He would just need to scan his fingerprint and the transaction for the subscription fee will be processed within minutes.
Also, recurring billing & payment management platforms are making the system of digital wallets more sophisticated and secure day by day.
Also Read: Alternative Payment Methods—A New-Age of Electronic Funds Transfer
– Customer Convenience
If you are part of the subscription business ecosystem, you will be aware of the importance of customer care. It is getting difficult to compete in the market with every passing day. No subscription business company can afford to lose its subscriber just because of customer dissatisfaction.
However, digital wallets offer your subscribers to pay their subscription fee conveniently—means of improving the subscription experience.
One of the leading causes of payment failures is credit card issues e.g. card cancellation, lost card, credit card limit etc. With digital wallets, there are no such limitations. So, digital wallets are a way to avoid involuntary customer churn.
Now, digital wallets can also be used for both online and offline recurring payments where subscriber does not need to enter long numeric figures for authentication and confirmations.
You see, digital cards bring a lot of ease to the subscribers because of which they have become so popular.
Recurring Payment through Credit Cards
Now that you are aware of so many benefits of digital wallets, you will probably be thinking why do people still need credit cards or any other payment method. Following are some of the reasons that you still need credit cards for subscription fee payments.
– Multiple Payment Options
No matter how convenient it is to pay a recurring fee by using digital wallets or any other payment method, the chances of payment failure remain intact (they can be more or less but never become 0). So, you need to have more than one payment method. In case of payment failure, the subscriber will have the option to shift to the other payment method. You get your payments in time as well as save the customer from getting unboarded.
– Catering to Old-Fashioned Subscribers
There is a league of subscribers that still prefer using credit cards. You cannot convince them to use modern payment methods. They find it easy to stick to one payment method that they have been using all along. The one and the only way to keep these subscribers on board is to offer them the payment methods that they find convenient and credit card payments are one of these payment methods.
Also Read: What Are the Online Payment Methods for Automated Recurring Payment Processing and How Do They Work?
– Customer Attraction
Companies plan different strategies for attracting subscribers. For instance, they offer freemiums and free trials so that they can get potential leads. However, credit card payments can also serve this purpose.
Customers can be offered rewards for paying through credit cards. Other than rewards, it is quite attractive that the customer is given a certain amount of credit which is usually more than the amount that he owns.
It is not easy for everyone to track his spending, but the use of credit cards makes it feasible for you to track all the transactions that you make. Banks that issue credit cards have launched applications for internet banking. It partially frees you from the responsibility of carrying your credit card everywhere.
To sum it up, both credit cards and digital wallets are effective ways of online subscription payments. No matter which payment method suits you more, it is better to offer your customers multiple payment methods. However, always consider the customer ease and payment processing speed because both these factors help in offering the best online recurring payment experience.
If you are looking for subscription management and payment processing software, then SubscriptionFlow is the right choice. It is a recurring billing and payment management platform that enables its clients to offer subscribers multiple payment methods. You can also get consultancy regarding which payment methods suit your business.
