Today, there’s a subscription for everything. Netflix, HBO, Amazon Prime and other streaming services. Pet food and meds. Cosmetics. Meal kits. Music streaming. You name it, there’s a subscription for it. It’s getting so popular that our economy is shifting around it, moving from the traditional business model of one-time payments to subscriptions that automatically recur monthly, quarterly or yearly.
The model is a win-win for businesses and customers. For customers, it’s easy and convenient and the fixed expenses help them budget each month. For businesses, recurrent subscription payments create effortless revenue and customer loyalty.
But for financial institutions, those wins aren’t always so clear.
Subscription Economy Facts
- A recent survey by PYMENTS and sticky.io found that the average U.S. consumer now has subscriptions with five retailers. That number increased in four consecutive quarters and is now twice what it was in the first quarter of 2021. It works out to roughly $200 per household. And they’re sticking with them. Only 14% say they plan to reduce the number of subscriptions they have while 51% are planning to add more.