Consumers have a growing appetite for subscription services, but they can quickly sour on the experience when their automated payments are declined. Unfortunately, hiccups in the payments process are not uncommon.
In fact, 27% of subscribers say that they experienced a declined payment within the past 12 months, according to Optimizing Subscription Payments, a PYMNTS and FlexPay collaboration that surveyed 2,195 U.S. consumers.
See the study: Optimizing Subscription Payments
The share of subscribers who have faced this issue differs notably across different subscription types. Forty-five percent of consumer services subscribers reported having declined payments over the past 12 months, followed closely by education and training subscribers at 43%.
Consumers who use streaming services, on the other hand, are at the lower end of the spectrum, with 27% of music streaming subscribers and 25% of media streaming subscribers reporting experiences with declined payments over the past year.
Payment declines can significantly affect subscribers’ satisfaction with their service providers, often leading to customer churn. Subscribers update their payment information 68% of the time when service payments are declined. But payment declines drove more than one-quarter of affected subscribers to cancel or change providers, with 17% canceling and 10% switching to a competitor.
Subscribers’ willingness to let their services end varies considerably depending on the actions subscription providers take after payments are declined, however. Subscribers whose services are interrupted terminate their contracts 30% of the time, whereas just 11% of subscribers who are notified of declines via email do the same.
Subscribers who are required to re-enter or revalidate their account details after a declined payment, on the other hand, are the most stable group. Subscription providers appear to cause the least disruption to their subscriber base when they simply require the updated information. These subscribers update their payment information 82% of the time.
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December 01, 2021 at 06:40AM
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27% of Subscribers Have Experienced a Declined Payment Within the Past Year - pymnts.com
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