Adding a recurring billing product or service such as a membership site, subscription newsletter, coaching club or other multiple-billing option business is the Holy Grail of online businesses.

Not only can you leverage your effort developing products or offering services, but you also add significant value to your business by making your ongoing income generation more consistent. 

I can tell you from first-hand experience, if you ever decide to sell a business that has recurring income, you can often get a 2-10 times greater valuation for that business if it is based on recurring income models.

One challenge for starting and managing a recurring income business has been finding a payment processor that will support recurring billing. 

Paypal supports it – but anyone who has based a significantly sized recurring income business on Paypal has had problems such as handling cancellations, integration, periodic loss of accounts and other issues. 

If your recurring billing business is a relatively high priced offering where you will have less than 500 subscribers, then you’re ok – but in a low-cost, high volume recurring billing model you need more.

My own preference is to open your own merchant account and operate membership software to manage subscriptions, cancellations, special pricing models, different membership levels of access, etc…

Why?

Simply because I own the customer and can change the back-end whenever I want.  If Harris Bank changes their policy and  I want to move elsewhere – no problem.

But, what happens if Paypal changes their policy, suddenly all of the accounts you have disappear – the only way you get your business back is if they re-subscribe to a new payment processor – guaranteed you will lose at least 1/2 of your business. 

Now, Clickbank has come out with a recurring billing capability – same thing holds true.  Clickbank is stable, they are not likely to disappear tomorrow – but you never know what change of ownership, leadership or policy may bring.  So – take a look at the Clickbank recurring billing option (Here is an FAQ to learn more) but please think through the very real possibility that something happens down the road cutting all of your subscribers off from you – where will you be then.

A better approach is to look at a combination of top-of-the-line membership management software like Membergate with your own Merchant Account – this model gives you the flexibility to change back-end processors anytime you wish (or have to). 

Jeff