How to Set Up Recurring Payments for Your Business
Setting up recurring payments allows your business to collect payments automatically on a schedule, reducing admin, improving cash flow, and creating predictable revenue.
The exact setup depends on the payment method you choose, but the core process follows the same structure.
Step 1: Choose the Right Payment Method
Before setting anything up, you need to decide how you want to collect payments.
The three most common options are:
- Direct Debit for long-term reliability
- Recurring card payments for fast onboarding
- Open Banking for real-time, low-cost transactions
Your choice depends on:
- how quickly you need customers to sign up
- how long payments will run
- how important payment reliability is
Step 2: Get Customer Authorisation
Recurring payments always require permission.
This typically involves:
- agreeing to terms at checkout (card payments)
- signing a Direct Debit mandate
- approving a payment request via banking app (Open Banking)
Clear authorisation protects:
- your business
- your customer
- your compliance obligations
Step 3: Set the Payment Schedule
You’ll need to define:
- payment frequency (weekly, monthly, annually)
- fixed or variable amounts
- start date and duration
This structure should match your business model:
- subscriptions → fixed monthly
- usage billing → variable
- instalments → fixed term
Step 4: Use a Payment Provider or Platform
Recurring payments are managed through a payment system.
This allows you to:
- automate collections
- store payment details securely
- manage billing in one place
A good platform will:
- support multiple payment types
- handle compliance requirements
- provide reporting and reconciliation
Step 5: Secure Payment Data Properly
If you’re handling card payments, security is critical.
This includes:
- tokenisation of card data
- PCI DSS compliance
- secure storage and transmission
For bank-based methods like Direct Debit or Open Banking, sensitive card data is not stored, which can reduce compliance complexity.
Step 6: Automate and Monitor Payments
Once live, your system should:
- collect payments automatically
- notify customers of upcoming charges
- flag failed payments
Ongoing monitoring helps you:
- reduce failed payments
- maintain customer trust
- keep revenue consistent
Step 7: Handle Failed Payments and Changes
Even automated systems need backup processes.
You should have a plan for:
- failed payments (retry logic, notifications)
- expired cards (for card payments)
- customer cancellations or changes
Reducing friction here improves retention and revenue recovery.
Common Mistakes to Avoid
When setting up recurring payments, businesses often:
- choose the wrong payment method for their model
- overlook failed payment handling
- ignore security and compliance requirements
- create complicated sign-up processes
Keeping things simple and secure leads to better results.
Which Setup Is Right for Your Business?
- Want reliability and retention? → Direct Debit
- Want speed and flexibility? → Card payments
- Want low fees and instant settlement? → Open Banking
Most businesses benefit from offering more than one option.
How SOTpay Simplifies Recurring Payments
SOTpay allows businesses to:
- set up recurring card payments with tokenisation
- collect Direct Debits
- send Open Banking payment requests
- manage everything in one place
This flexibility means you can match payment methods to customer preference without increasing complexity.
Make Getting Paid Simple
Recurring payments remove friction from the payment process and give your business more control over revenue. With the right setup, you can reduce admin, improve cash flow, and create a smoother experience for your customers.
Get a no obligation demonstration by our team of payment experts, to understand better how recurring payments can benefit your business, and how SOTpay can make it easier.
