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any news or feedback regarding a tendency from Patrik?
when you say “invoices should not be generated unless users agree to be billed” I totally agree (and by the way, this does not apply to your paypal gateaway).
With the recurring bank transfer, the user agrees to be billed every month unless he cancels the contract. Nothing happens without the user’s consent and that is why this is common practice in Europe.
Because in contrary to your current bank transfer version and also the paypal option, the majour advantages for the user of the recurring bank transfer are:
1) The user does not need to care about the regular renewal, his listing will be online continuously
2) The user does have controll over his liquidity. Because When he receives the invoice he can decide whether he pays this week or next week – in contrary to the paypal gateway where an invoice is generated automatically and the amount is automatically and immediately debited from the account – which for many clients in Germany is unacceptable.
And this is why in Germany most clients choose the recurring bank transfer opportunity: They have controll over their liquidity and do not need to bother about renewals unless they want to cancel the contract.
Just like the mobile phone contracts of my employees. I definitely would not want their phones to be switched off every month until I log on the internet and renew and pay their contracts. And I also would not want the invoice amounts to be automatically debited by paypal from my business account without my prior consent, due to liquidity reasons. This is why I as a business client – like most others – choose recurring bank transfer.
I see this obviously is not common practice in the U.S. but it really is widely accepted like this in Europe – and for good reasons, I would say.
Many thanks and best regards
As operator of the platform I set up a package for a listing, e. g. :
Price: 120 Euros,
Payment mode: bank transfer
Listing period: one year (365 years),
Cancellation period: 2 months before expiry of listing,
Date of recurring invoice: 2 weeks before expiry of listing;
A user creates his listing and books this package on 01. January 2019. Immediately, the listing goes online and the invoice is sent to the user. The invoice contents the following:
Invoice date: 01. January 2019
Invoice item: Package XY for 120 Euros
Package period: 01st Jan. 2019 until 31st Dec. 2019
(the period on an invoice is essential due to regulations in Germany, if not even Europe).
The contract is concluded by 1) the user booking the package and 2) the platform sending the invoice/confirmation. Thus the user is obligated to effect payment.
If the user does not cancel in time (in this case by 1st November 2019), then the package renews. In this case, an invoice is automatically created and sent to the user two weeks before expiry of the listing (on 17th Dec. 2019):
Invoice date: 17th Dec. 2019
Invoice item: Package XY for 120 Euros
Package period: 1st January 2020 until 31st Dec. 2020
The booking-invoice-contract process has at first nothing to do with the payment and definitely not with the bank. But with this contract, the user is obligated to pay, because the contract is made and his listing is online right away. So, even if he pays one week after his package has started, this has no impact on the package period. This makes it much easier for me as operator of the platform to calculate and to rely on contracts made and payments to be effected. And the user does not need to wait for money to arrive on my account, his listing is online right away.
Of course, if a user really does not pay his invoice, then I would need to be able to delete the listing or to set it on draft until payment is effected (which then, as well, would not have any impact on the package period).
Package period starts on 1st January, if payment is not effected by let’s say 1st Feb., the listing is set to draft. When then, on 1st March, the user finally effects payment, the listing goes online again – but the package period is still 1st Jan. until 31st Dec.
This is how it works in Germany (and I guess in many other European countries) with recurring payments by bank transfer and people/companies are very used to this procedure.
For any questions, please do not hesitate to get back to me. Looking forward to your feedback.