What is one-time payment ?
The difference between a one-time payment and a recurring payment is primarily a matter of frequency. Therefore, a definition of these two types of payment is necessary to clearly differentiate between them.
A one-time payment is a single transaction. Whether by credit card, bank transfer, or direct debit, the payment remains unique and is not automatically repeated.
This payment method remains the most widely used in e-commerce for single purchases. Payment is processed immediately in the case of a bank card, or within a few days for a standard SEPA transfer (SCT type).
What is a recurring payment ?
Recurring payment refers to a repeated transaction that charges for the continued provision of a product or service. It is most often based on a subscription model.
The customer pays amounts at regular intervals, with or without commitment, over a defined period.
There are 3 types of recurring payment :
- Fixed recurring payment
- Variable recurring payment
- Hybrid recurring payment.
Fixed recurring payments
Fixed recurring payments are based on an identical amount billed at regular intervals. This model most often applies to services offered as a subscription.
The customer is automatically billed each month on a date defined in advance.
Variable recurring payments
Variable recurring payments are based on non-fixed billing. The amounts vary according to the level of use of the product or service.
Two variable billing models exist :
- Usage-based billing : the company bills the customer based on the amount of service used during a billing period.
- Volume-based billing : the price is set according to the quantity of product or service consumed by the customer. The more usage increases, the lower the unit price becomes, in order to encourage larger volumes. This model is most often based on a pre-defined quantity, which serves as the basis for billing.
Hybrid recurring payments
Hybrid billing combines fixed and variable payments. In this recurring model, the contract stipulates a usage threshold. If the customer exceeds this threshold, additional fees are applied.
One-time payment and recurring payment: the advantages and disadvantages
One-off payment and recurring payment each have strengths and limitations that are important to understand in order to choose the most suitable solution for your business.
One-time payment : advantages and disadvantages
Benefits :
- Simple and quick management, the transaction is a one-time event.
- Immediate or rapid payment depending on the payment method.
- Ideal for one-off purchases or occasional services.
- No long-term commitment for the client.
Disadvantages :
- No recurring revenue for the company.
- Difficulty in retaining customers in the long term.
- Less visibility on future revenue.
Recurring payment : advantages and disadvantages
Benefits :
- Regular and predictable revenue for the company.
- Strengthens customer loyalty and relationships.
- Suitable for subscriptions or ongoing services.
- It allows you to anticipate cash flow and growth.
Disadvantages :
- More complex management and regular monitoring required.
- Risk of non-payment or abandonment by clients.
- Less flexibility for customers wanting a one-time payment.
What payment methods are available for one-time and recurring payments ?
Various payment methods allow for managing one-off and recurring payments.
One-off payment methods
- Bank card : the most common method for online and in-store purchases. Payment is instant and secure.
- Standard bank transfer : used for larger amounts or business transactions. Processing time can vary from a few hours to a few days.
- Instant transfer : allows you to transfer funds in seconds, 24/7, ideal for urgent payments.
- Single payment : the customer authorizes a one-time payment from their bank account. Suitable for one-off invoices or single services.
- Initiation of payment via the bank interface : the payment is launched directly by the merchant or service, with the customer’s agreement, to secure and accelerate the transaction.
- Payment wallets : PayPal, Apple Pay, Google Pay, which allow for fast and secure payment without entering bank details for each transaction.
These methods guarantee a single and immediate payment, suitable for occasional purchases or one-off services.
Recurring payment method
- Bank card : the customer authorizes automatic debit at defined intervals. This solution is common for online subscriptions.
- Transfer order : the customer sets up a scheduled transfer from their bank, with a frequency and amount defined in advance.
- Direct debit : the customer agrees to recurring debits from their bank account. This payment method is widely used for subscriptions and ongoing services.
- Payment wallets : Electronic wallets like PayPal, Apple Pay, and Google Pay can also process recurring payments. They are commonly used for mobile subscriptions.
Summary table : one-time payment and recurring payment
Here is a comparison table between one-off payment and recurring payment :
| Criteria | Punctual payment | Recurring payment |
| Definition | Transaction completed only once. | Transaction repeated at regular intervals. |
| Frequency | Unique | Monthly, annually or according to a defined periodicity |
| Billing type | Fixed amount | Fixed, variable or hybrid |
| Main use | One-off purchases, one-off services | Subscriptions, ongoing services |
| Customer engagement | No long-term commitment | With or without commitment |
| Revenue predictability | Weak | High |
| Management | Simple and fast | More complex, requires monitoring |
| Customer loyalty | Limited | Reinforced |
| Examples | E-commerce purchase, single invoice | Subscription, regular usage service |
| Payment methods | Bank card, standard bank transfer, instant bank transfer, single direct debit, payment initiation, wallet | Bank card, transfer order, direct debit, wallet |
Automate recurring payments with CentralPay
CentralPay simplifies the setup and management of recurring payments. The solution automates payment collection while ensuring secure transactions.
- Quick setup of recurring payments by credit card, bank transfer or direct debit.
- Automation of deadlines to avoid missed and late payments.
- Centralized tracking of transactions and payment statuses.
- A seamless experience for the customer, without manual action at each deadline.
- Enhanced security and compliance with payment standards.
CentralPay helps companies optimize their recurring billing and control their cash flow.
