Subscription-based payments are set to grow significantly, new research has claimed. Offering consumers a convenient way of paying for products and services, subscription payments can cover regular bills without the need for going anywhere near the checkout.
According to payments platform Paysafe, half of international consumers today already have at least two subscription payments leaving their bank account every month, with 27% expecting this number to increase in the next year.
Surveying consumers in the US, UK, Canada, Germany, Austria, Italy and Bulgaria in April 2020, PaySafe revealed that the motivations behind subscription-based payments often vary, but is mostly centred around two factors; cost and convenience.
A sizeable 44% of consumers agreed that subscriptions provide better value than other payment options for a similar service or product. Additionally, just over half (53%) of consumers agree that subscriptions are a more convenient method of paying for goods or services they use regularly.
While subscription payments are growing in popularity, consumers do have some concerns however. Some 46% of people say that they worry that subscriptions can be difficult to cancel and make them feel tied into long-term commitments.
Consumer oversights can prove costly too, with 35% of consumers admitting overpaying for a subscription service that they have stopped using, but failed to cancel.
“The burgeoning subscription economy is driving traditional pay-per-product companies to move to subscription-based models,” noted Daniel Kornitzer, Chief Business Development Officer at Paysafe. “However, it is clear from our research that companies currently offering or considering offering subscription-based payments should factor in a high degree of customer flexibility and transparency to their service offering.
Do this successfully and companies can simultaneously increase consumer trust and alleviate common pain points often experienced with subscription-based payments, such as consumers overpaying or feeling like they are trapped into a long-term financial commitment.”
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