Rise of Subscription-based services
Consider this. Subscription businesses have grown by more than 400% over the last nine years. This is about five to eight times faster than traditional businesses!
“Why own when you can subscribe?” seems to be the new mantra amongst consumers.
People today want more freedom in their choices. This includes how they consume and how they pay for it. More people prefer to access goods and services on demand rather than own them. They want the freedom to pay using the means of their choice and expect merchants to accept a wide range of payments and currencies.
More than half of Europeans today use one form of subscription service or the other. The number of Europeans who have started using subscription services has increased by over 30% since the pandemic started. More and more people in Europe feel that subscriptions give better value than other payment options. And it makes paying for regular-use goods much easier.
Why are subscriptions so big right now?
That’s because subscriptions are easy to use. Once you set it up, you do not have to worry about buying again or running out. This is particularly true for daily essentials and regular use products and services.
Customers can manage their budgets better since they know how much they are going to spend each month. They also have the freedom to increase or decrease what they consume, which gives them more control.
For merchants, subscriptions help to create an ongoing relationship with the buyer rather than a one-time transaction. This leads to greater value from each buyer relationship over a longer period of time. If you engage and retain your customers, you can build a loyal base and drive the adoption of higher-priced services over time.
Subscriptions help you to predict better and meet demand when it arises. This can include assessing demand and supply or planning where to invest.
Subscriptions also help you to gather insights on how your customers use your products and services. You also get to know what they like and what they don’t. These insights can help you make adjustments where required, thus boosting engagement with your buyers.
Challenges you can face with recurring payments
While subscriptions are great for business, it isn’t always easy to run such a service. You have to think about the costs, complexity, and scale.
There are many points which you have to consider. “Will my customers be happy to pay every month with confidence? How many payment methods and currencies should I offer? What if some transactions fail to process? How about renewals and cancellations?”
To run a subscription service, you will have to set up recurring payments. But this can pose some challenges. Here are a few you can expect:
• Scaling your payments: Recurring payments might seem simple when the number of customers is less. But things can get tough to handle when you have hundreds or thousands of customers
• Complexity: There are over 180 currencies and 200 different types of payment methods. This makes processing payments a complex affair
• Failed Transactions: Loss of revenue from failed transactions can be costly to your business. It also burns customer experience and affects their confidence in your brand
• Data silos: Subscription payment data has to flow between different departments to help them to perform better. Data silos would have an adverse effect on the payments flow
• Compliance: You have to comply with local data and anti-fraud laws to ensure your customers’ data is safe. This strongly affects how much your customers trust your brand
How automating recurring payments can help
A hassle-free payment experience is key when you process recurring payments.
Use a robust subscription management service to run your business smoothly. This is a fully automated service that kicks in from the time a customer signs up for the service. It tracks and manages the subscription through its lifetime and ensures hassle-free billing and payments. Such services also tend to be fully compliant with security standards and local laws.
Ensure you offer a wide range of payment methods and support multi-currency payments. Keep track of regional payment trends and customer preferences. This will help you use the most effective ways to accept payments from customers in every market you serve.
Spot and deal with failed transactions promptly. Detecting failed transactions from amongst thousands of transactions is an uphill task. Use an automated subscription software that can quickly detect fails and deal with them on time.
A subscription management service will help you process recurring payments smoothly. Even when your transaction volumes are high. This helps to keep payments seamless and secure. This results in happy customers who are engaged with your brand.
Choosing the right payments partner is crucial. Opt for a global, all-in-one payments partner who offers strong expertise and localized offerings. They should be able to support multi-currency and multi-platform payments. The right partner will help you scale your payments, offer contextual support, and focus on the end-user. After all, in the end, it is all about getting the best out of your payments.