The ability to accept recurring payments is an important component for exponential business growth. One of the popular players in the payment industry is Venmo, which is known mostly for its user-friendly peer-to-peer transactions. However, businesses who primarily use Venmo hit a snag when it comes to recurring payments because it does not support them. Let’s take a look at addressing this block and what it takes to allow you to keep transacting on Venmo while enabling the functionality of recurring payments.
What Are Venmo Recurring Payments?
Despite its wide acclaim, Venmo does not offer a built-in feature for recurring payments, marking a significant drawback for subscription-based models or any business requiring a regular payment schedule with their clientele. There's a common misconception that While Venmo is billed and sold as a peer-to-peer means of exchanging cash built on ACH rails it can cater to recurring payments, possibly fueled by its affiliation with PayPal, which indeed supports this feature.
When Is Venmo Coming Out With Recurring Payments?
As of now, Venmo has not communicated any intentions to launch a recurring payments feature. This presents a notable challenge for businesses that require merchant initiated transactions such as those operating with subscription models. The absence of a recurring payments option in Venmo's services highlights the importance of having a versatile payment system.
This creates a need for businesses to diversify their payment options. While Venmo remains a popular choice for single transactions, the lack of recurring payment functionality necessitates looking towards other solutions that can accommodate this need. Exploring these alternatives not only fills the immediate gap left by Venmo but also prepares businesses for a more flexible payment stack.
Understanding Recurring Payments: CIT and MIT
Recurring payments are transactions that occur on a regular schedule, typically used for subscriptions or services that require ongoing payments. These payments are vital for businesses that rely on steady cash flows from services like monthly subscriptions, membership fees, or utility bills. Within the framework of recurring payments, there are two main types: Customer Initiated Transactions (CIT) and Merchant Initiated Transactions (MIT).
Customer Initiated Transactions (CIT)
CITs occur when the customer actively initiates a payment transaction. This typically happens during the initial setup of a subscription or a service where the customer enters their payment details and authorizes the business to charge them regularly. For instance, when a customer subscribes to a monthly streaming service and provides their credit card information for billing, that is a CIT. These transactions may require 3DS in some regions such as EU and Brazil.
Merchant Initiated Transactions (MIT)
MITs, on the other hand, are transactions initiated by the merchant without direct interaction from the customer at the time of the transaction. After the initial setup and authorization by the customer, the merchant can charge the customer's stored payment method according to the agreed-upon schedule. An example of MIT is the monthly automated billing for the streaming service previously authorized by the customer.
Both CITs and MITs are crucial components of the recurring payments landscape, and understanding their differences is important for businesses to manage transactions effectively.
Spreedly's Stored Credential Framework
To facilitate the secure and efficient handling of these transaction types, especially MITs, Spreedly provides a comprehensive Stored Credential Framework. This framework is designed to optimize transaction processing by securely storing customer payment credentials and managing them according to industry standards and best practices. The Spreedly documentation on Stored Credential Framework offers detailed insights into how this system can be utilized for managing both CITs and MITs, ensuring compliance and enhancing transaction success rates. For more in-depth information, you can visit Spreedly’s Stored Credential Framework documentation.
Spreedly's Plan for Venmo Recurring Payments
Spreedly is set to facilitate the integration of recurring payments for Venmo when this feature becomes available. It will utilize its Advanced Vault and Stored Credential Framework to manage and secure Venmo recurring transactions. This will include support for both Customer Initiated and Merchant Initiated Transactions, crucial for handling subscription-based payment models. Spreedly's focus will be on ensuring PCI compliance with industry standards and maintaining efficient transaction processing for Venmo's recurring payments.
Navigating Venmo's Lack of Recurring Payments Support
While Venmo currently does not support recurring payments, businesses can take proactive steps to prepare for when this feature becomes available. There is a strategic approach to manage payments effectively in the meantime.
Capturing a Payment Method
Firstly, businesses should capture a payment method that does support recurring payments. This involves securely storing customer payment details for future transactions. Spreedly offers a robust solution for capturing and storing these payment methods, ensuring compliance and security. For more details on how to capture a payment method using Spreedly, you can refer to our payment method documentation.
Establishing an Initial Customer Initiated Transaction (CIT)
Once the payment method is captured, the next step is to establish an initial customer initiated transaction. This can be done using a Spreedly Verify call, which not only verifies the payment method but also returns a Network Token ID (NTID). Spreedly stores this NTID in the vault, setting the foundation for future recurring payments. More information on the Spreedly Verify call and its functionalities can be found in their API documentation.
Establishing an Initial Customer Initiated Transaction (CIT)
For the initial transaction, businesses can utilize Venmo through the Braintree gateway, which is currently the only gateway Spreedly supports for Venmo transactions. This step allows businesses to process transactions on Venmo while preparing for the eventual implementation of recurring payments.
By capturing a suitable payment method, establishing an initial CIT with a Spreedly Verify call, and performing transactions on Venmo via the Braintree gateway, businesses can effectively navigate the current limitations of Venmo and lay the groundwork for a seamless transition to recurring payments once they are supported.
Bridge The Recurring Payment Gap
The current absence of recurring payment support on Venmo poses a significant challenge for businesses reliant on regular transaction models. However, with Spreedly's Payment Orchestration platform, features like our Advanced Vault and Stored Credential Framework, can help your business navigate this limitation. Spreedly offers a strategic approach to capturing payment methods that support recurring payments, establishing initial customer-initiated transactions, and integrating with Venmo through the Braintree gateway. This preparation sets the stage for a smooth transition to recurring payments, ensuring compliance, security, and efficiency. By leveraging Spreedly's comprehensive solutions, you can maintain your businesses transaction flow on Venmo while being ready to embrace its recurring payment capabilities when they become available.
Talk to a Spreedly Expert about enabling your business to accept Venmo and recurring payments.