What does Europe think of Direct Debit for subscription payments?
By Samantha NorthNov 20163 min read
Back in September, GoCardless launched a UK-wide survey focusing on the popular subscriptions industry. We wanted to explore what members of the public thought about the various payment methods used to pay for subscription services. With the rapid rise of subscription services in the UK for everything from magazines to bacon, we thought this was an unmissable opportunity!
The results confirmed our suspicions - the UK loves Direct Debit. Despite its advanced age, the popular payment method is still the country’s most trusted choice. But our curiosity didn’t stop at the UK border. As GoCardless is a European payment provider covering Bacs, SEPA and Autogiro, we wanted to bring in essential insights from our key markets in France, Germany, Sweden and Spain.
So, do subscription customers in Europe love Direct Debit as much as those in the UK do?
We commissioned YouGov to survey the state of subscriptions payments in these four European markets. Like last time, 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.
The research produced some intriguing results about the state of subscriptions payments across Europe.
Subscriptions in France
Direct Debit: Just as in the UK market, Direct Debit performed very well in survey results among French consumers. Almost one third of those surveyed - 29% - reported feeling ‘very comfortable’ with using Direct Debit for subscription payments. In contrast, only 11% said they were ‘not at all comfortable’ with it.
Credit cards: Paying by credit card is not a popular option for French subscription customers. In fact, 39% of those surveyed rated it rock-bottom, as the payment method that they were ‘not at all comfortable’ with using. Only 8% said they were ‘very comfortable’ with credit card payments.
Debit cards: This was a fairly popular option among French subscription customers, with 28% claiming to be ‘very comfortable’ using debit cards for making recurring payments. Only 11% said they were ‘not at all comfortable’ with this method; a stark contrast to the results for credit cards. It looks like people feel more reassured knowing that their recurring payments are coming out of existing funds in their bank accounts, rather than from credit.
Subscriptions in Germany
Direct Debit: The results for Direct Debit among German consumers were more subdued than those in the other markets. 17% of respondents rated themselves ‘very comfortable’ paying by Direct Debit, but on the other hand 12% said they were ‘not at all comfortable’.
Credit cards: As in France, paying by credit card is not an especially popular option for German subscription customers. 22% of those surveyed said they were ‘not at all comfortable’ with paying by credit card. Only 11% said they were ‘very comfortable’ with credit card payments.
Debit cards: 16% of German respondents claimed to be ‘very comfortable’ using debit cards for making recurring payments. Only 14% said they were ‘not at all comfortable’. There’s not much to choose from between the two extremes here.
Subscriptions in Spain
Direct Debit: In Spain, our survey found that subscriptions consumers love Direct Debit almost as much as in the UK, with a large 31% reporting that they were ‘very comfortable’ using it. Only 10% said they were ‘not at all comfortable’ with using Direct Debit.
Credit cards: Both card-based payment methods fell somewhere in the middle, with 14% of respondents ‘not at all comfortable’ with credit cards, compared to 22% who said they were ‘very comfortable’.
Debit cards: Debit cards came out almost level with credit cards, scoring 12% of responsdents who were ‘not at all comfortable’, and 23% who said they were ‘very comfortable’.
Subscriptions in Sweden
Direct Debit: The biggest surprise of our research project was found in Sweden. Here, the popularity of Direct Debit blew all other payment methods away. An entire 37% of Swedish subscription users rated it the payment method they were most comfortable with. Only 10% of the respondents were ‘not at all comfortable’ with using it.
Credit cards: Among Swedish consumers, credit cards lag behind other payment methods, with only 20% of respondents saying they were ‘very comfortable’ in using them, while 19% were ‘not at all comfortable’.
Debit cards: Debit cards emerged as the second more popular payment method in Sweden, with 31% of respondents rating debit cards top, while only 8% rated them bottom.
If you're looking to take payments from European countries, take a look at our guide to opening a Business bank account in Europe.
What does all this tell us about the state of European subscription payments?
For subscription providers focusing on these European markets, there are clear differences that should be kept in mind in order to provide the most effective service tailored to specific market needs.
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.
Sign up now and start taking European subscription payments with GoCardless today.