How The Payment Landscape Evolved For Subscription Businesses in 2021

In the recent past, economic, political, and social conditions changed worldwide. The subscription business market also experienced sudden ups and downs that have played role in evolving the digital payment landscape. Everyone says that the pandemic has speeded up the process of shifting businesses to the subscription business model. But at this point, you must delve into the details that how changing circumstances evolved the digital payment landscape in the realm of subscriptions.

Also Read: 7 Ultimate Ways To Nip The Cause Of Late Recurring Payments In The Bud

Payment Globalisation

The pandemic affected the global supply chains and shipments were not allowed to cross the borders. However, when it comes to the digital arena, there is no concept of borders. SaaS companies already had an open field to play. Their reach to the local and international subscriber base and the bulk of customers shifting to online sales and purchase because of covid-19 brought a boom in their subscription businesses. Just like them, real-world businesses servitised their products to find the entry point in the extensive subscription business market.

Since the subscription business network expanded in the recent past, there was an evident need for payment methods that could facilitate the global reach of SMBs. The process of global payments usually works in a way that the merchant’s bank in a region sends the request of authorization to the bank of the customer who can be in some other region of the world. The fee of authorization varies from country to country. Other than this constraint there are regulations regarding tax rates and invoicing etc. Such factors make global payments quite a complex process.

Realizing the need of the hour, many recurring payment processing systems are introduced to facilitate the business community to operate beyond borders without any friction. They handle the whole process from managing subscriptions to payment processing.

Multiple Payment Methods

When experts say that subscription businesses need multiple payment methods it is not just because it is something to make you look good to the customer rather it is the need of the hour. Statistics show that a considerable percentage of customers leave a platform when they do not find the payment method of their choice. Why? If the payment method that you offer can serve the purpose, then why there is a fuss for the other payment gateways?

Today, businesses revolve around the customer experience and payment experience is part of it. Offering more than one payment method will speed up payment processing and checkout completion. This improvement in payments is directly linked with revenue growth. Your revenue predictions and targets will be more accurate when you receive recurring payments in time.

According to McKinsey, in 2020, three-quarters of Americans used some kind of digital payment method. Also, the young population is more speedily adopting digital payment methods. Adoption among 18 to 34 year-olds has grown to 93 per cent. Mobile wallets are also becoming popular for they remove the need to carry credit cards. Though there are customers preferring modern payment methods, there are many customers who prefer credit cards whom no retailer wants to leave. So, offering multiple payment methods has become a necessity.

In the year 2021, the trend of offering multiple payment methods and the adoption from the user side is still improving.

Multiple Payment Gateways

During the payment processing, the payment gateways play the role of a ‘gatekeeper.’ To understand this concept, suppose there is no payment gateway and you are receiving recurring payments from your customers. What will happen?

The customer payment data will remain prone to leak.
The cases of chargebacks will increase.
Friendly-fraud activities will also increase.
Your business reputation will be tarnished.
There will be no mechanism to keep a check on credit card limits and expiry.

Now, just imagine how difficult would it be to process online payment with these discrepancies. That’s the reason subscription-based businesses opt for multiple payment gateways. Even if one payment gateway is down, the other one would remain active that ensures the security of the customer information. Friendly frauds are not easy to deal with, however, payment gateways are the best solution against them.

Also Read: How Multiple Payment Gateways Integration In iOS And Android Changes The Game For Application Industry

Real-Time Payments

Real-time payments mean the completion of the transaction within minutes. At present, merchants and retailers are moving towards real-time payments so as to facilitate their subscribers and streamline their revenue management. The triggers that have speeded up the shift towards real-time payments include biometrics, digital currencies, and mobile banking applications etc.

Pricing, revenue predictions, and discounts and coupons that subscription businesses offer are the outcome of data-driven decisions. However, these decisions can only turn out to be beneficial if the data that you are using is accurate. Real-time payments have made it possible that your sales and purchase data-to-day customer data is accurate.

Future Prospects Regarding Online Recurring Payments

McKinsey reports that the threat of frauds to banks and other payment processing firms has increased in the recent past. The surge in fraudulent activities is quite evident because more businesses moved to the digital world during the pandemic spread. Businesses are rapidly shifting to AI-based high-tech tools to remediate payment frauds.

Also, the business community is now aiming to offer recurring customers personalized payments. Customer habits needed to be studied when you intend to offer personalization. And the customer is the primary source of studying customer buying and spending habits. AI-based recurring payment solutions provide you with data analysis that can help personalize the payments.

To achieve future sales and revenue targets, advanced challenges are lying ahead. It is high time that companies should start properly investing in data analytics to ensure secure payments in the future. Another precious source of customer information is the data remains that you can track from the customer journey. However, without an efficient tool, the data is of no use.

Also Read: Recurring Payments Management—What Should Be Your Strategy to Fight Necessary Evils of Chargebacks & Friendly-Frauds

If you look for a recurring payment processing solution that can help you with data analytics as well, then SubscriptonFlow is the one-stop solution for you. The platform is cloud-based and uses AI algorithms to help businesses cope with changing subscription management and payment processing trends.