Recurring payment is a Directpay feature that allows a partner to charge a linked account periodically i.e. monthly, weekly or daily.
The Use case
BuyNow is a company that allows to Buy a product now and Pay Later. As a partner, you can setup a recurring payment on a linked account by specifying a later date with the preferred frequency e.g. Charge Mr A's Bank with the sum of 5000 Naira, starting next week Monday for the next 4 months.
This means that
The monthly payment amount is 5000 Naira
Mr A is paying back a total amount of 20,000 Naira.
The payment is charged on the same day every Month
The payment starts on the set start date i.e. next week Monday
The payment ends once the 4th payment is completed i.e. the 4th month.
How does it work ?
Firstly, A standing order will be created on the user's bank account. At the point of linking their account and setting up the recurring payment, their account won't be charged unless the start that is set for the current date.
Next, the end User's account will be charged on the set date. The standing order will automatically be canceled by the bank's system by the end date.
Types of cancellation
A recurring payment can only be cancelled the following ways.
This is by the bank's system using the end date attached to the standing order
This happens when the user cancels the standing order from their bank account.
A business can pass the direct-pay cancellation web-hook and cancel a direct-pay payment from a customer’s account.