State of Subscriptions: The payments chapter

What’s inside this subscription payments chapter?

• The latest 2022 benchmarks and payments methods trends–exclusive research with data from Recurly’s global customers such as Twitch, TIME, Sprout Social, FabFitFun, Paramount+, and Sling

• An in-depth look into key subscription payments metrics, including the most popular payment methods, decline rates, alternative payment methods (APM), currencies, and the impact of subscription payment methods on churn, plus industry-level statistics so you can get the most out of this chapter

• An analysis of how this payments data is present in the subscription industry and how you as a subscription business should respond

• The most popular payment trends of the year, along with the overall impact of Recurly on merchants and how they can use subscription payments as a growth strategy

Recurly merchants saw a 119% revenue lift by enabling PayPal and a 154% revenue lift by enabling SEPA.

Subscription payments are a critical pillar of the most successful brands’ strategies. Without a comprehensive understanding of payments, your business is left in the dark in terms of what your subscribers want and need for a frictionless payment experience. In fact, 56% of consumers would be “permanently put off shopping on a site” if their preferred payment method wasn’t available on a website. If your goal is to maximize revenue growth and purchase conversions, subscription payment methods need to be at the core of that strategy. 

What your and many subscription businesses are missing is just that–a data-driven subscription payments strategy that puts your customers’ preferences at the core. Our State of Subscriptions: The payments chapter is your key to making that happen.

Alternative payment methods are one of the most effective ways to generate more revenue and better manage fraud.

Did you know Recurly merchants saw a 1.4% lower rate of fraudulent declined transactions with alternative payment methods compared to that of credit and debit cards? If you’re still only offering the most basic payment methods to your subscribers, your business is suffering. Knowing this type of information helps your subscription business make informed decisions on what subscription payment methods to offer your customers. Ultimately, payment methods are a catalyst for growth. Leveraging data and insights from real subscription brands is a smart way to establish benchmarks for your business and truly understand where your business lies in this highly competitive landscape. 

The data shared in this subscription payments chapter isn’t just any data–Recurly works with more than 2,200 merchants and supports more than 50 active subscribers on a monthly basis. Our research digs deep into how these merchants perform in the subscription marketplace and how they use Recurly to power their product or service offerings. You’ll get a full overview of the most popular payment methods, decline rates, alternative payment methods, currencies, and the impact of payment methods on churn. Use this data to learn what payment methods you should be offering to your customers in every market, how currencies can greatly impact conversions, and what to do about decline rates and churn rates. 

Did you know debit cards are the most popular payment method, making up 44.7% of transactions in Recurly?

But this is just scratching the surface. Download our State of Subscriptions: The payments chapter to uncover what this truly means for your business–debit cards actually have the highest decline rates of all payment methods. How do you tackle this and ensure that you provide the subscription payment method consumers want while watching out for your business goals? It’s all in our payments chapter, and you’re only one click away from getting the answer.

If you’re not dedicating focus to payments, you’re doing your business a disservice. This report was written to share the latest subscription payment benchmarks and trends so you can elevate your payments strategy. The key to a successful payments experience is knowing what your customers want, so download our State of Subscriptions: The payments chapter now to grow faster, smarter, and stronger.

Want a sneak peek of the payments chapter? Here it is.

Decline rates have remained steady in 2022, hovering around 6.0% for credit cards, 13.0% for debit cards, and 7.0% for APMs. Compared to 2021, Recurly merchants have seen an increase in decline rates for all transactions. Overall, decline rates are lowest for credit cards and highest for debit cards. 

Considering all transactions made in Recurly in 2022, debit cards had the highest average decline rate (13.6%), followed by credit cards (7.6%) and APMs (7.4%). APMs had the lowest initial transaction decline rate at 9.0%, and credit cards had the lowest recurring transaction decline rate at 6.0%. For both initial and recurring transactions, debit cards also had the highest average decline rate at 14.4% and 13.1%, respectively. An initial transaction is the first transaction on the first invoice for a subscription, while a recurring transaction is the first transaction on all but the first invoice for a subscription.

Of all available payment methods in Recurly, PayPal experienced the lowest decline rates, and APMs had a lower decline rate than debit cards.