Subscriptions have become an increasingly prevalent method of engagement in the payment market.
They exist today for a whole host of products and services, from getting laundry detergent pods delivered to accessing entertainment, to driving a new car every three months.
They are viewed by many as a convenient way to make regular payments seamlessly without returning to the checkout. According to specialised payments platform Paysafe’s recent Lost in Transaction research a half of U.S. and 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.
The research, which surveyed consumers in the U.S. as well as Canada, the UK, Germany, Austria, Italy and Bulgaria in April 2020, revealed that the motivations behind subscription-based payments vary, but mostly centre around cost and convenience.
A significant 44% of consumers agree that subscriptions are 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 regularly use.
Among this ongoing surge in demand however, some consumers still have concerns. 46% of people say that they worry that subscriptions can be difficult to cancel and make them feel tied into long-term commitments. Also, being forgetful can be costly, with 35% of consumers admitting overpaying for a subscription service that they have stopped using but failed to cancel.
When it comes to successfully keeping track of subscription payments, the research showed that the overall number of consumers struggling with this is falling slightly, having decreased from 37% in 2018 to 34% in 2020 – based on Paysafe’s ongoing Lost in Transaction research.
“The burgeoning subscription economy is driving traditional pay-per-product companies to move to subscription-based models,” commented 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.”
Expert Analysis: Convenience continues to be key and as this deeply interesting research underlines, subscriptions can be a pivotal part of elevating consumer efficiency in a whole host of sectors.