It seems just about everything is becoming a subscription. Streaming services, gyms, socks, delivery services, restaurants, and even car washes have joined the subscription economy.
Not only are subscriptions delivering on convenience, but it is also delivering many monthly fees. Americans especially love subscriptions as many are signed up to as much as 10 or more.
Nowhere did subscriptions hit a fever pitch as when the pandemic first hit the country, forcing millions of Americans to camp out at home. With having only their electronic devices for entertainment, streaming services, restaurant food, chocolate, and clothing subscriptions surged in popularity.
Subscription Economy Already Flourishing Before The Pandemic
Well before the pandemic, the subscription economy was already enjoying a steady climb in popularity. After the pandemic diminishes, it is expected to continue growing in every industry.
In fact, by 2025, the subscription economy is predicted to grow to $1.5 trillion according to the UBS financial services firm.
So Why Should More Businesses Adopt Subscriptions?
If heavy-weight companies have seen their revenue flourish, subscriptions were definitely the driving force. Companies such as Apple and NBC Universal’s Peacock video streaming platform have reported that these subscriptions have contributed considerably to their bottom line.
For restaurants, subscriptions have become another opportunity for so many that were forced to shut down during the pandemic. What they found were customers willing to pay for this service.
Smaller and medium-sized businesses can also take advantage of the many benefits of recurring payments. Some of them include:
- A consistent and predictable income
- Lower billing and collection costs
- Payments received on-time
- Convenient and time-saving
The Best Ways To Accept Recurring Payments
There are plenty of recurring payment services on the market today. What it ultimately comes down to is selecting the one that is the best fit for your business. Here are just some of the features to consider when selecting your automated recurring payments solution.
1. Evaluate Platform Fees
Although customers enjoy an easy and seamless experience on the front-end, the back-end is full of complex mechanisms that must fire at full speed, on a monthly basis.
In the event a payment method fails, a platform must be ready to resolve this issue, immediately. Take time to evaluate what exact services your money is paying for.
2. Think Globally
Remember that your customers can be visiting your site from anywhere in the world. If you wish to set up recurring payments for customers in other countries, you must be fully up-to-date with international tax laws.
If that is too overwhelming, then consider selecting an automated recurring payments platform that can manage all these details for you.
3. Maintain Payment Compliance
Before you begin accepting recurring credit card payments, select a subscription payment provider that is compliant with both industry security and privacy standards, not only in specific regions but globally.
If the platforms are reputable, they will surely be PCI compliant. Also, determine how they handle the various security measures as laid out by GDPR and PSD2 mandates. With all this in place, you can proceed to take payments without worry.
Recurring Payments Are The Future
As the numbers clearly demonstrated, subscription businesses will continue to grow and with that, the growing need for recurring payments. The sooner companies get on board and take advantage of this lucrative opportunity, the sooner they can reap the benefits of increased revenue and solid customer relationships.