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Recently, Australian company Afterpay was acquired by Square Inc to the tune of $29 billion – Square’s largest ever acquisition to date. Afterpay is a buy now, pay later payment platform, so customers can pay for purchases in instalments, with no interest or fees (as long as payments are made on time).

Amazon is getting in on the party too, with the recent launch of “Affirm,” its own buy now, pay later solution for Amazon purchases over $50. And PayPal just spent $2.7 billion acquiring Paidy, a Japanese buy now, pay later platform, hoping to get a big piece of the action in the Asian market.

Sounds familiar? Well, yes, something about the “buy now, pay later” approach rang a bell for us too. It’s actually a lot like the concept of a subscription – paying over time for a product or service you enjoy right now. In most of the world, BNPL (as it is known) is a fairly new option for consumers, but it is steadily gaining ground, particularly among Gen Z. While the global market share of BNPL is just over 2%, in some markets like Australia and Germany, it is as high as 10% and 18% respectively.

Afterpay, Affirm, Paidy... we seem to be headed to a buy now, pay later bubble. This is due to many of the same reasons why consumers love subscriptions too.

Let’s take a look at four of those reasons:

1. Subscriptions are awesome because they are easy on the pocket

When given the option to pay an upfront sum, or a slightly larger sum paid over 12 months, most people will choose the second option, mainly because it’s easier on your bank account. Like BNPL, subscriptions spread the cost of an investment over time. The payment is small and ongoing, and it feels “fitting” to the current use and enjoyment of the purchase. As far as breaking open the wallet goes, subscriptions are much more pleasant, affordable, and enticing than forking out a large amount of hard-earned cash in advance.

2. Subscriptions are seamless and satisfying

A big part of shopping is habit. Consumers tend to buy the same brands, year in, year out. They go back to the same shops that they love. They stick to companies that serve them well. Over time, they become comfortable and accustomed to certain products. For subscription companies, creating smooth, seamless experiences is essential to making their subscription a habit among customers. This is what the MarketONE all-in-one subscription tech platform is designed to do – it enables brands to deliver personalized bundles and offers, and tailor subscription journeys for different customers. This helps create seamless and satisfying experiences, turning the subscription into a beloved daily habit that customers won’t want to live without.

3. Subscriptions are a long-term emotional investment

When people shop, they go through a process of “mental accounting”. This is much more than just crunching the numbers and checking whether they can afford it. It incorporates emotion, which is one of the key drivers of consumer behavior. People who connect on an emotional level to a product or service are far more likely to stick with it. Subscriptions are built on this model, a long-term relationship that becomes stronger and deeper over time, ensuring that customers develop an emotional attachment to the subscription and keep coming back for more. Subscription intelligence data is the key to understanding what drives customers, and what they want and need to become more attached to the subscription than ever before.

4. Subscriptions open up new worlds of enjoyment and possibility

The convenience of subscriptions is one of the key reasons they are so powerful. The subscription is available whenever the customer wants it, without any extra effort. It is already bought and paid for and the whole transaction forgotten. All that’s left to do is enjoy. With solutions like Vindicia Retain, subscription companies can prevent annoying transaction errors that lead to churn. Beyond just simple convenience, brands can amplify the added value of a subscription with easy onboarding, better payment experiences, and user personalization that builds customer connections, ensuring subscription brands can deliver those “feel-good” moments that foster growth.

Join the subscription club

If we are heading to a bubble in the buy now, pay later revolution, driven by the new Gen Z consumer who craves convenience and seamless experiences, this also helps explain why subscription demand is growing faster than ever before. For subscription companies, getting ahead of consumer demand with subscription tech that facilitates those personalized, seamless experiences is the key to drawing customers to their offerings. Furthermore, unlike BNPL (which is actually no more than a consumer financing method), subscriptions offer a sustainable long-term business model that – when done right – can future-proof your revenue.