What is a recurring transaction?

Point of Sale (POS) Glossary

Recurring transactions occur after a buyer authorizes a merchant to charge their credit or debit card regularly. A monthly cable bill or yearly magazine subscription are both examples of recurring transactions.

Recurring transactions do not require repeated permissions from the cardholder beyond the initial consent. A fitness club might process checkout at their store point of sale system for the first month of membership, but then subsequent months could be charged automatically if the customer agreed. POS or web approval is not needed for recurring transactions.

Some merchants will offer a free or low-cost trial of a product and then bill recurring transactions after the trial offer has been completed. Many banks will allow recurring transactions to continue, even after a card used to sign up has expired. They must eventually be canceled with the merchant or disputed to stop the charges.