There's more risk there, though, no? A customer could cancel before the end of the year and simply stop making the remainder of the payments. Sure, there's recourse, both through the credit card companies and courts, but that takes time and effort and possibly lawyers (aka money).

If you require annual customers to pay the entire year up front, you get the money, and that's that, barring credit card chargebacks.

and they're a pita for business users -- they have to deal with either reimbursing or at least tagging 12x the charges on their personal or business card.