The problem is, they don't charge for recurring credit card payments. Only one-time. And as someone who's signed a lot of merchant account agreements, there aren't different charges from Visa/MC/Amex for recurring payments vs. one-time. The fees are the same--this is just a ripoff from Verizon.
We (ISP) switched from authorize.net to ippay because they had much better rates on recurring payments. They claim to be able to process with a telco/recurring flag that has much lower fees. All I know is our fees went down a lot: www.ippay.com/index.php?q=ippay
Might explain why vzw wants to push people to recurring payments.
Customers who have recurring payments set up are undoubtedly cheaper to service than one-time payers. They're less likely to fall behind on their bills, and getting customers to pay up after the fact costs money. This sounds like a reasonable charge to incentivize recurring payments.
A recurring payment, though, is more likely to fail. For instance, if a card is at the limit, a recurring payment simply fails, and then you've got to find some way to notify the customer that they need to address the issue.
Someone coming to your site to pay his bill, on the other hand, gets notified right away if there is a problem and so can get right on addressing it.
Also, when people get new cards they often forget to update places that have the card on file, leading to much hassle for the vendor.
Another advantage of customers who are paying month-by-month at your site--you have up sell opportunities that you don't have with customers who are on recurring billing.
For a service that the customer considers to be reasonably high priority, I suspect that the combination of less billing attempt failures and the extra money from up sell attempts make the month-by-month manual customers actually cost less to deal with then the recurring customers.
