How do consumers prefer to pay for recurring purchases in 2019?
How do consumers want to pay for subscriptions, memberships, bills and instalment plans? The answer to this question can hold the key to conversion rate optimisation for businesses. Knowing which payment methods your customers are comfortable with, and which they actively prefer to pay with, can have a significant impact on revenue generation for businesses taking recurring payments.
We partnered with YouGov to ask 12,785 consumers across the UK, France, Germany, Spain, Denmark, Sweden, USA, Canada, Australia, and New Zealand what their payment preferences are in 2019. The research covers four typical recurring purchase use cases: traditional subscriptions, online subscriptions, household bills, and instalments. Together, these markets represent more than two-thirds of the world’s recurring payment volume.
Want the full report? Download your FREE copy here. Or watch Duncan Barrigan, VP Product at GoCardless, deliver the foreword on video below.
Which payment methods do consumers prefer to use for recurring purchases in 2019?
As the data shows, the answer to this question depends on where your customers live. If you take a look at existing research, for example, you’ll see that cheques are more relevant in America relative to the rest of the world. While in China, mobile payment transactions are huge. Cultural and technological landscapes can differ drastically from country to country. And these can heavily influence consumers’ payment preferences.
Let’s take a look at some key insights from the data…
German consumers don’t like credit cards...
On average, 40% of Germans are ‘very unlikely’ to use credit cards (and 29% feel the same about debit cards).
...but North American consumers love credit cards
Canadians are more likely to make recurring payments on credit cards than any other nationality surveyed. 27% are ‘very likely’ to use them for traditional subscriptions (such as gym memberships) and 26% are for household bills and online subscriptions.
Americans are almost as keen – credit cards are their preferred method for both traditional and online subscriptions.
People stick to tried and trusted methods to pay bills
Outside North America, consumers in every country surveyed said they were ‘very likely’ to pay their household bills the traditional way – by Bank Debit (or as Europeans tend to call it - Direct Debit).
Consumers want alternatives to credit cards and debit cards
In 9 out of 10 markets surveyed, around one-third of consumers said they were likely to choose Bank Debit to pay for online subscriptions. And yet, looking at the top 44 global subscription websites, only 1 offered Bank Debit as a payment option (and only in Germany).
There’s a divide over digital wallets like PayPal
In Denmark for example, an average of 44% of consumers were ‘very unlikely’ to use a digital wallet to make any kind of recurring purchase. Whereas in Spain, an average of 16% were ‘very likely’ to.
Preference guides consumers’ purchases
For B2C companies, understanding consumer purchasing preferences is critical. Having been given a wide choice of payment methods, consumers are minded to exercise it - and they may well go elsewhere if they can’t pay the way they want.
If there’s anything to take away from this research, it’s that there is no ‘one size fits all’ global offering for recurring payments. There is no single solution that will suit all your customers across every country, income bracket or age group. But armed with the right data, you can implement the best solutions for your business, and optimise your conversion.