“Everything is a subscription. Music, your dog food, razors, you name it, there’s probably a subscription behind it.”

Vaishali Parekh, Product Lead at Meta, declared at Money 20/20 Europe that the subscription economy is booming, but can it grow even further?

Consumers are as dependent on subscription payments more than ever as it enables a seamless and automated transaction to pay for services without even clicking or submitting personal information. 

This popularity has seen subscription-based companies grow by five-to-nine times over the past decade, with businesses understanding how predictable and reliable these payment methods can be. 

So, how are companies offering subscription-based payments able to grow to limitless heights? Parekh broke this down into four key main areas; value, convenience, personalisation and community. 

Value is important as a business needs to provide a consistent subscription service that is not only reliable, but efficient. “If your business isn’t worth subscribing to, they won’t come back”, simple, remarked Parekh, citing Netflix as the gold standard for a valuable subscription service. 

Personalisation is key as “customers love to feel special” – being offered tailored solutions, in particular preferred payment methods, is essential in making the customer feel needed. Parekh used Spotify’s weekly curated playlists designed for each user knowing what music they like to listen to. 

“If your services are not easy to use, people will leave”, said Parekh as she believes that convenience trumps everything. Subscription models, much like the checkout experience for payments, are aiming to become as frictionless as possible in order to attain and retain customers. 

Lastly, people want to belong, and that’s where community comes in. Parekh mentioned Peloton, which offers a multitude of benefits and features that enable users to become a part of a community that can lead to higher rates of engagement. 

A seamless payment experience 

But where do payments come into this? Parekh revealed that the payment process of a subscription is one of the most crucial aspects of building a sustainable business. 

“One of the most crucial parts of any subscription-based company. Offering various payment methods to cater to different preferences allows for customers to easily subscribe. 

“When it comes to payments there are four main things. One is a seamless payments experience, when you have a seamless payment experience, you should look at a frictionless payment journey, think about Apple Pay.”

Vaishali Parekh, Product Lead at Meta / credit: Callum Williams

Creating a holistic seamless checkout experience has always been one of the key priorities for point-of-sale e-commerce payments companies, and subscription-based firms are also aligned in this ambition. 

By embedding payment solutions for easier and quicker online transactions, consumers will not only be more appealed to that product or service, they will potentially go back and remain subscribed if it provides the most convenience to them. 

Parekh highlighted that if a user is watching something on Netflix for example and their subscription runs out during a movie or TV show, that user is not going to want to go through the tenuous process of entering in card payment details. 

A one-click solution enables that person to go back to whatever it is they were watching much quicker. 

Supporting multiple currencies

As mentioned previously, subscription-based companies are growing exponentially, but with these companies continually scaling, there is a need to address multiple currencies in multiple markets. 

Parekh said: “Globalisation doesn’t just mean your customer base is global, you need to make your service easy for everyone anywhere to subscribe to your service.”

Countries have different preferred payment methods and a wide range of differing payment services. India, for example, is currently embracing the Unified Payments Interface (UPI), adopted by millions of people. It then becomes essential for this payment method to become integrated into any subscription payment destination to acquire a customer base in a burgeoning market such as India. 

Payment flexibility was the final key component of what makes a reputable subscription-based service highlighted by Parekh.

Allowing users to pay in their preferred payment method is one thing, but being able to choose when to pay and being more visible to what and where you are subscribed to is important for users to know what they are paying for, allowing for greater control. 

Payment Expert’s Analysis: As Big Tech’s involvement in payments continues to rise and catch attention from various areas of the sector, with Meta being one of the most notable names throwing its hat into the ring, the observations these firms are making should not be lost on stakeholders.

Subscription payments, which play a big role in the operations of social media specialists like Meta, are an area in which Big Tech firms clearly have a great deal of insight and are looking to grow further, with Elon Musk on course to embed X Payments into the social media platform soon.