A recurring payment is a financial transaction based on an agreement between the payer and a recipient or merchant over a specified timeframe. Recurring payments work similarly to scheduled payments. But whereas scheduled payments allow for the specification of the payment date, recurring payments allow for payments at specific time intervals.
Like scheduled payments, recurring payments can be used to pay subscription fees, loan repayments, and membership fees.
Recurring payments can occur at various intervals, such as weekly, monthly, quarterly, or yearly. They can continue for a specific duration or until the payer or payee decide to cancel them. In principle, they are a set of withdrawal authorizations where a user grants a specified number of withdrawal privileges to another user.
After a user authorizes a withdrawal, the recipient user may make one withdrawal per period within the withdrawal limit.
Withdrawals will only be successful if there are sufficient funds in the account. This is because a withdrawal authorization is not a promise to pay, so there is no need to always have the necessary funds available.
UPCX only allows withdrawals when the payer has given sufficient authorization.