Declined subscription payments may result in an unsubscribe rate
By most accounts, consumers’ love affair with retail subscription services has never been stronger, and yet a simple wrong payment drop can seriously test their loyalty. novelty of PYMNTS Optimize subscription payments surveyed 2,200 buyers to see what drives them to buy – and what makes them say goodbye.
Download the report: Optimization of subscription payments
While many industries have been hit hard by the pandemic, retail subscription services have been one of the exceptions, as the lockdown lifestyle has resulted in increased demand from consumers who still need it. a retail solution – and something new to look forward to.
Today, 80% of consumers in the United States have at least one subscription, up from 72% in February 2020. But one factor stands on the list of frictions that could send them shopping elsewhere: hiccups in the process. payment.
In the PYMNTS report Optimize subscription payments, a collaboration with FlexPay, consumers were asked about their subscription usage and payment preferences, as well as their reactions when a recurring payment was declined.
On average, more than 25% of consumers have experienced a chargeback in the past 12 months, but these results vary widely depending on the types of in-game subscriptions.
For example, in the consumer services category, 45% of subscribers reported a drop in payment in the past 12 months, followed closely by education and training subscribers at 43%.
In terms of consumer reaction to this often preventable event, payment refusals led to 27% of subscribers canceling the service entirely, and 17% opting to do business with competitors. Among subscribers who experienced a drop in payment, 35% said the experience had a negative impact on their satisfaction with their services.
Among the segment of subscribers who abandoned their services, 53% said their satisfaction declined after the payment was declined. Among subscribers who switched to competitive services, 43% said their satisfaction declined after declining a payment.