Delighting subscribers: Recurring payments trends, tech & compliance
The ever-evolving needs and preferences for particular payment options continue to drive purchasing behaviors, making the subscription payments experience a crucial element in personalization, where the right method and timing are key for acquisition and retention.
When working on a payment strategy, a few questions come to mind:
How do you keep up with new trends while staying compliant and secure?
How do you enable the flexibility to offer new payment methods and currencies?
How do you choose the right alternatives and payment partners?
To answer these questions, Recurly’s VP of Customer Success, Mary Rosberg, sat down for an exciting conversation with:
Prasanta Chakraborty, Sling TV General Manager of Payments
Sharon Gross, Optimized Payments Director of Recurring Payment Strategy
Siamac Rezaiezadeh, GoCardless VP of Product Marketing and Insights
Keep reading to get all the insights–and don’t forget to watch the on-demand webinar to get first-hand strategies and best practices to revamp your recurring payments game.
Where are subscription payments heading?
Subscription payments are rapidly growing. New technologies, consumer preferences, and market dynamics significantly impact the direction of the industry. Here are the top five trends payment leaders see across the subscription space:
1. Alternative payments & digital wallets
Digital wallets have become a convenient way for consumers to subscribe seamlessly to recurring services–specifically for younger generations, where 21% of Gen Z prefer this type of payment.
When you think about customer payment options, they should derive from the demographics you’re trying to reach out to and the cost of your subscription. Combining these two will determine whether you accept only credit and debit cards or offer alternative payment methods like PayPal, Amazon, or Apple Pay too.
2. Localized payment options
Not only is a generational approach important, but a geographical one as well. Global brands must have the ability to accept regional payment methods. For example, credit cards aren’t used in some countries, and a local banking solution is the perfect fit.
So, when selecting the payment options, give your audience three to five appealing alternatives and consider these country trends.
3. The rise of mobile app subscriptions
Today, most subscription businesses are adding mobile apps as another option to the web experience. And it’s no surprise. Consumers love the convenience they get by using their phones to enjoy and track their subscription services, make faster payments, and stay connected to brands. The app touchpoint is an opportunity you don’t want to waste.
4. AI-powered tools in payment collection
Using AI in payments is a clever move, both from an anti-fraud and payment recovery perspective. Machine learning algorithms help predict when a customer is at risk of churning, allowing you to take certain actions to develop a customer-centric approach to your recovery process like:
Forecast when someone has funds available for a payment retry
Predict when is the best time to collect a payment
Understand which communication channels are more effective
And subscriber data will tell you this and more insights to guide you in a more customer-centric direction for payment collection. More on this below.
5. Payment tokenization for secure transactions
Consumers care about secure and seamless payments. Tokenization is a win-win for brands and consumers, making transactions more fluid, more likely to be successful, and less fraudulent.
However, the problem for merchants is figuring out how to employ tokenization. It's difficult for a company to choose the best processing option–and most of the time, the most effective solution is partnering up with someone who can tackle the task.
Payments as an acquisition & retention strategy
Transparency and flexibility are essential to acquire subscribers. There has been a steady increase in regulations, whether it comes to General Data Protection Regulation (GDPR) and privacy laws or mandates from card companies like Mastercard asking for easier cancelation processes.
Ensure your subscribers get the payment options they seek with clear terms and conditions, such as billing dates and cancel or pause options. This will help you build your brand image and trust from day one.
But this is just one side of the coin.
Unfortunately, there is not one silver bullet that will solve involuntary churn. Subscription management and recurring billing platforms like Recurly provide several tools like account updaters and intelligent retries to help you decrease churn rates and recover more revenue.
Recommended reading: Streamline payment processes for revenue efficiency
The role of data & tech in subscription payments
Back in the day, the goal was finding the cheapest acceptance cost in payment processors. Now, the discussion has changed and is driven by data.
Subscription companies want visibility across their platform and can access granular consumer data to improve customer experiences.
Get more strategies and best practices to make payments a powerful growth strategy in our webinar Delighting subscribers: Unlocking the power of payments.