Mercator Takes a Look at Mobile Payments-Friendly Subscription Market

October 19, 2018         By: Steven Anderson

Subscriptions can be a great thing; they run hands-free in some cases, tied to a bank account or something similar, even set up through mobile payments. With so many different applications for this concept—everything from razors to magazines is sold by subscription—it’s worth taking a look at the field. Mercator Advisory Group did just that with its latest report.

The new Mercator report, titled “US Recurring Payments Market Forecast, 2017-2021: Set It and Forget It”, took a look at the overall size of the market, and a look at seven of the providers of recurring payments-based services in the US market. The report examines several of the issues facing such providers, as well as what tools are available to help achieve here.

The survey revealed that customers checking out with a card on file was surprisingly popular. In the last 12 months, 54 percent of respondents did so. This is higher than the 50 percent of respondents used a digital wallet, but lower than the 60 percent who entered payment information manually.

The report revealed that the market is set to hit $473 billion by 2021. Subscription payments will be a major part of that, and so too will online bill pay—a recurring payment with the best of them—and digital commerce operations. Additionally, several recent changes made by credit card networks and even some legislation stands to fundamentally alter the market.

Mercator director of debit and alternative products advisory service Sarah Grotta noted “Buyers appreciate the convenience of entering their account information just once. Merchants appreciate the connectivity they achieve with their customer when recurring transactions are used and the consistent cash flow they create. Similarly, issuers like the transaction volume that recurring transactions create when cards are used, but if not managed well, these transactions can result in loss of customers and financial losses.”

Essentially, the recurring payment market is doing pretty well, and there’s room for improvement beyond that. Good news for those currently putting it to work, and even better news for those looking for a way to better connect to customers.

Recurring payments aren’t a foolproof way to connect, but done right, there’s lots of opportunities afoot for companies to advance using one of the oldest-and newest-mobile payments system applications: subscription billing.