This article from FIS highlights some critical factors that need to be taken into consideration when introducing a subscription model in your business.

From streaming to software, gaming to graphic design, cooking to conferencing – almost anything can now be paid for by subscription.

The average consumer spends $273 per month on subscription services – up 15% from $237 in 2018. Looking back at the four years we’ve had, maybe it’s no wonder. With subscription models, customers can get the products and services they want delivered straight to their homes with the freedom to scale their consumption by taste or budget, benefits made even more attractive by the events of the last few years.

So when it came home in the early months of the pandemic, the world of work had some catching up to do.

Employees and businesses alike were all too aware of the gaps – not just the tools and software people needed to work from home, but how the business expected to pay for them. It meant that, by the middle of May 2020, the number of new trial subscriptions for business and professional services jumped by 115%. And today, the model shows no signs of slowing. Subscriptions in the form of Software as a Service (SaaS) are expected to be worth $145 billion by the end of 2022 – a 29% increase from 20203 And 2024 will be the first year revenue from SaaS will exceed revenue from its traditional on-premise software counterpart.

By making it more convenient for consumers to access products, services and software, subscription models and recurring payments have found success in almost every market. And by enabling more consistent monthly revenue (and no need to chase payment), their appeal extends to digital businesses like yours. Wondering how to introduce your own? Here’s what you need to consider.

The components of convenience

So, you want to offer your products or services by subscription. You’ve got the content to encourage prospects to sign up, but how do you keep them enrolled? As we’ve seen for ourselves in FIS Power Your Payments report, the key to a successful subscription model is convenience.

So, let’s take a look at four considerations for a convenient subscription model.

1. Be transparent about pricing

Part of the appeal of subscriptions is the consumer’s ability to set and forget. They know they’re paying the same amount for the same content each month. If that’s going to change for any reason – like a price increase or the end of a free trial – your customers need to know ahead of time.

2. Offer a range of payment methods

No customer wants to go out of their way every month. In fact, 16% of people will drop out of purchasing online media, content or software if they can’t use their preferred payment method.4 Consider offering payment methods that go beyond the popular card schemes.

3. Reach out to subscribers

After the terms of service are signed and the first payment is taken, you don’t have to disappear. Marketing communications that remind customers of your value and new products and services can help keep subscriptions rolling. And confirming a payment as soon as it happens helps them manage their expenses.

4. Stay on top of your service

Any interruption can cost you customers – 17% of people who had a payment declined let their subscription terminate, and 10% switched to a competitor.5 As your subscriber base grows and the number of payments you’re processing increases, make sure you’re optimizing acceptance.

Payments shape the subscriber experience

What you’ve probably noticed is that these key considerations for convenient subscriptions have payments in common. There’s a reason for that.

FIS® Power Your Payments report revealed that, in 9 of the 12 countries surveyed, customers had a preferred payment method for their subscription because it was convenient for them.And many of their preferences were different.

In Australia, Germany and Spain, the report found that a leading digital wallet is the preferred way to pay.7 And in China, 39% of people choose to pay via a popular super-app, making it the country’s top payment method. In fact, the majority of people asked would be willing to pay for subscriptions with mobile and digital wallets if given the option.

And isn’t giving people the option what subscriptions are all about? It means that the success of a subscription model is tied to the payments experience.

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This article has been republished with permission from FIS.

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Discover seamless and convenient payment management

Worldpay from FIS® understands the link between seamless payments and a convenient subscription model. It’s something they’ve learned not only through research, but also through helping digital businesses like yours deliver seamless, convenient recurring payments experiences for customers.

One way is with their Account Updater. This tool uses our card network connections to keep customers’ card-on-file information up to date. So even if a customer gets a new card, their payment will be accepted without their intervention, continuing their subscription without interruption.

And for the 49% of customers with other preferences, FIS Global payments gateway supports more than 300 alternative payment methods, giving customers the breadth of choice that drew them to subscribe in the first place.

Get all the insights

Want to learn more about the rise of subscriptions and how to make yours successful? Be sure to read the full Power Your Payments report and get into the popularity of subscriptions and recurring payments in much more detail.