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Direct Debit flies ahead for UK subscriptions

Samantha North
Written by

Last editedJan 20202 min read

Subscription services have really taken off in the UK in the last few years. With so many of us feeling increasingly squeezed for time, we take enthusiastic advantage of having our essentials delivered to our door, whenever we want them. Thanks to the internet age, busy people can now subscribe to all manner of products and services, from the traditional magazine and newspaper subscriptions to more random, slightly quirkier items such as underwear, makeup, or even bacon!

With all these subscriptions (and rashers of bacon) flying about, how do people usually pay for them? We at GoCardless were in a curious mood recently. So we decided to gather some opinions from across the country about how people prefer to pay for their favourite subscriptions. What we found out not only surprised us, but also encouraged us.

We commissioned YouGov to conduct a survey for us, exploring the UK’s favourite subscription payment methods. We wanted to know how comfortable people were with using different payment methods to pay for their digital or physical subscriptions. This could be any product or service for which they pay a regular monthly fee. Here’s what YouGov found out.

Out of the sample of 2,044 UK adults surveyed, Direct Debit emerged as the most popular payment method, which people felt most comfortable using. Direct Debit has been around for a long time and is considered old-fashioned by some. But nevertheless it’s also seen as reliable and well-trusted. In fact, it’s the UK’s favourite payment method and its usage continues to grow.

Direct Debit enjoys a strong reputation throughout the UK, especially because customers are protected by the reliable Direct Debit guarantee. On top of this, Direct Debit is also very simple to set up and involves no effort after the initial set-up - money is just taken automatically from your account on the specified day. Unlike credit and debit cards, there is no need to update your details.

To put the results in context, here’s a breakdown of how credit cards, debit cards, and PayPal fared against Direct Debit.

blog > images > direct-debit-uk-subscriptions > uk-subscriptions@2x.jpg

According to the data, credit cards were the method people were least comfortable with using to pay their subscriptions. A quarter of the sample said they were ‘not at all comfortable’ paying by credit card. Responses were measured on a scale of 0–10, with 0 being ‘not at all comfortable and 10 being ‘extremely comfortable’. At the opposite extreme, 20% of respondents said they were extremely comfortable paying by credit card.

Next up was PayPal, another payment option commonly offered by UK subscriptions companies. 19% of people said it was the method they were least comfortable with, but 25% rated it top, saying they were ‘extremely comfortable’ with it.

Debit cards scraped in very close to PayPal, with 18% finding them the least comfortable method, and 25% the most comfortable. There’s not much to choose from between the two methods.

But the clear winner in this survey was Direct Debit. People are clearly very happy using Direct Debit to pay for their subscriptions. Only 14% said it was the least comfortable method for them, while a whopping 32% rated it top, saying they were extremely comfortable using it.

For subscription providers, the clear takeaway here is that you really can’t afford not to include Direct Debit among your payment choices for new subscribers. With GoCardless, you can manage all payments seamlessly, taking advantage of low fees, flexible timings and a fully-automated system. The sign-up process is quick and easy with no minimum term. We even integrate with popular accounting packages including Sage, QuickBooks and Xero.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,044 adults. Fieldwork was undertaken between 6th - 7th September 2016. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

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