The newest version of Magentonow features recurring payments, but what exactly do they do?
Recurring payments are most often used for subscriptions or products with installment payment plans. When a product like this is purchased from your store, the customer is redirected to a 3rd-party payment system where a ‘recurring payment agreement’ with the store is signed/authorized by the customer.
A recurring payment agreement is an agreement between the customer and the store authorized at the side of a payment system. In the payment system, this agreement authorizes the merchant to charge the customer account again in the future according to the recurring profile setting.
These are called ‘recurring profiles’ in Magento. In the 3rd-party payment system, a recurring profile is an accounting record that captures payments on a regular basis and according to the payment schedule defined in the recurring profile.
A recurring profile submits the information about the frequency of a payment being initiated to the payment system.
Currently, by default, Magento supports purchasing items with recurring profiles only for the PayPal payment system and only through the Express Checkout method.
Recurring Profiles-What the Customer Sees
When recurring profiles are set up for the products you’ll offer on a subscription or payment plan basis, the customer will see the payment profile parameters as product additional information on the Recurring Profile tab of the product view page in the frontend.
Also, in the Recurring Profile Start Date field, the customer can choose the date when to start the recurring profile if this is set up in the recurring profile settings in the backend.
When the customer adds a product with a recurring profile to the shopping cart, the recurring profile schedule information and the profile start date are displayed as part of the shopping cart product description. If the customer is not allowed to or does not specify the recurring profile start date, by default, it is set to the current date.
For products with recurring profiles, the customer can only choose between the fixed-price shipping methods (flat, table or free) when checking out. After choosing the payment method, the customer is redirected to the payment system where a recurring payment agreement for payments is created. After the customer returns to the Order Review page, the order can be placed. Below is an example of a weekly recurring profile.
For more information about Magento recurring payments, please see oursolutions page.