Subscription payment methods

Deciding on which payment methods your subscription business will accept can have a major impact on acquiring and retaining customers. Listening to your customers and analyzing your transaction data is critical. For example, older customers typically prefer traditional credit cards, while younger consumers are more likely to use mobile or smart payment options, including digital wallets.

The markets you operate in will also factor into your payment method's decision-making. If you're a U.S. company that does not sell internationally, there's probably little upside in offering cash-based or alternative options. However, those same payment methods are more popular in developing markets like Africa and Asia.

Target market payment considerations

One of the many benefits of the subscription business model, especially for direct-to-consumer (D2C) products and services, is that you do not need to feel confined to a particular region. Today, even the most modest subscription-based business can have an international footprint.

To be successful, your business will need to set up a subscription billing and payments system that supports the preferred payment methods in your target markets. Forcing customers to pay for services using a payment method or currency that they don’t normally use will create unnecessary friction.

Preferred payment methods across the globe

Subscription businesses should be aware of regionally preferred payment methods, including:

• North America: Credit and debit cards are the most popular forms of payment in the U.S. and Canada, as well as PayPal, Apple Pay, Google Pay, Amazon Pay, and more.
• Europe: Consumers’ payment forms of choice can vary from country to country in Europe, but debit cards, direct debit, and local payment methods such as iDeal transactions are typically more common in EU nations than in the U.S.
• Asia Pacific: Various payment platforms are popular throughout the region, with mobile payment applications have gained steam in recent years, as well as the use of wallet-based payment methods and cash.
• Latin America: Debit cards have relatively low penetration in the region, while credit cards and cash-based options like Brazil’s Boleto Bancario remain popular.

Stay informed by data

Your payment method mix should be dynamic and informed by data and subscription intelligence. When it comes time to assess the methods you offer — an audit that should be done at least yearly — analyze the data to address inefficiencies and ensure you're not missing out on revenue opportunities. For instance, if you offer a payment method that makes up less than 3% of your overall transactions by value, you may need to reconsider its place.

Prevent payment fraud

Subscription businesses need to remain vigilant in preventing payment fraud. Different types of payment fraud are more common in some regions than others. For instance, prepaid card fraud is fairly common in the U.S., whereas it may be less of a concern in the EU where prepaid credit cards are not as popular.

Subscription businesses need to educate themselves on payment fraud activity in various regions and implement appropriate safeguards. For example, Europe’s SEPA Direct Debit platform gives users the ability to have a dispute automatically honored if raised within 8 weeks of the payment, or 13 months if the customer feels the transaction was unauthorized. These processes could be abused by fraudsters at the expense of subscription businesses. Without the right fraud-prevention protections in place and the ability to track previous chargebacks, your business could be buried in chargebacks that siphon away potential revenue.

The bottom line

Vindicia makes it easy to support all the payment methods your customers prefer while protecting against fraud and minimizing chargebacks. Vindicia Subscribe delivers complete billing and payments across the entire subscription lifecycle, supporting the following payment methods and wallets:

Vindicia supported payment methods

• ACH
• ACHeck21
• Amazon
• American Express
• ApplePay
• Baja finserve EMI
• Boleto
• Carrier Billing
• Diners
• Direct Debit
• Discover
• ECP
• External Billing
• Google Pay
• HostedPage
• JCB
• Maestro
• Mastercard
• Merchant-accepted payment
• Military Star
• Net Banking
• PayPal
• Rupay
• Skrill
• Sodexo
• Visa

Vindicia supported payment wallets

• Airtel Money
• AliPay
• Amazon Pay Wallet
• AMEX eZeclick
• CashU
• Freecharge
• Google Pay Wallet
• JioMoney
• Lazy Pay
• OlaMoney
• PayCash
• PayPal
• Paytm
• PayU Money
• PayZapp
• PhonePe
• QIWI
• Skrill Moneybookers
• WebMoney
• Yandex
• Yes Pay
• YPayCash

Go deeper

To learn more, download our white paper: How to choose a payment processor for your subscription-based business, or our eBook: Understanding credit card fees.