Recurring payment are transactions that occur on a repetitious basis, such as a subscription service where payments are charged to the same payment method for a pre-determined duration of time.
How Does Recurring Payment Work?
In a recurring payment, a customer will purchase a product, item or service. Instead of charging one price, the merchant will establish a set interval of time in which the costumer will be charged an agreed-upon sum. This payment will continue until the customer either cancels the service or, if the charge applies to one lump amount is paid off.
Below are differences between Recurring Instalment and Recurring Subscription:
|Item||Recurring Instalment||Recurring Subscription
(Non Predefined Billing Date)
(Predefined Billing Date)
|1) No of predefined payment||Yes||No||No|
|2) Predefined billing date||No||No||Yes|
How Does Prorate Calculation for Recurring Payment Calculated?
Below is an example of prorate calculation:
- Normal billing date duration set by the merchant is between January 15th until February 2nd
- Then, the charge imposed earlier for example on February 10th
Hence, the calculation will be as follow:
= RM 100 per month / total days per month x days
= RM 100 / 31 days x 5 days
= RM 16.13
Thus, the prorate total amount will be RM 16.13
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