Passwords, E-Mail Verifications Can Add Friction To Subscription Signup Process

It’s every subscription service’s dream: Out of 140 million Spotify users who can stream anything from U2 to Beethoven, about 60 million pay for the privilege to listen to whatever music they like on demand. With a little less than half of its base as paying customers, Spotify sees remarkable conversion rates several times higher than the typical 2 to 5 percent, Revulytics reported.

But getting users to sign up in the first place can be a challenge for most subscription services. The signup process can involve creating a password or verifying an account – even before a user gets to test out the service. It’s no surprise, then, that some users who intend to purchase a subscription never end up subscribing – or pay for access to a service like Spotify.

With a 61.9 out of 100 average score in the PYMNTS Subscription Commerce Conversion Index, merchants still have some ways to go to ease the customer signup process for subscriptions. Here are five different ways merchants can handle signups, along with alternatives that can reduce friction.

Just over 84 percent of B2C sites required a password for sign-up. Passwords are not the most user-friendly sign-on methods. Users long ago tired of forgetting passwords while, at the same time, hackers have become increasingly savvy at cracking them. There may be a time in the not-so-distant future when passwords could be rendered obsolete, replaced by new modes of identification that may actually be unique to the user, such as that of the Fast IDentity Online (FIDO) Alliance.

A little under a third – or 28 percent – of B2C sites allowed social media for sign up. This method of signup is especially important to merchants that are not household names. Most users do know Facebook, and have likely seen a Facebook login on another website. As a result, they may be more comfortable with the signup process, especially when using a merchant subscription for the first time. Still, having one Facebook login across multiple sites might go against conventional wisdom about online security, but users find this type of login to be very convenient. For those who don’t use Facebook, third-party sign-ons are available through platforms like Google.

Fifteen percent of B2C sites required e-mail verification. While a user might write down a password – or memorize it – some passwords are, well, just forgotten. Sometime after signing up for a subscription service, a user might need to reset a password. But if the e-mail address was typed incorrectly when signing up, he or she might not be able to get to that step. By verifying the e-mail address ahead of time, merchants can ensure that their customers can reset or change their passwords after sign-up if needed. But this process can introduce friction, making it harder for users to sign up. So, as an alternative, merchants can offer a delayed e-mail verification during their second login.

None of the B2C sites required cell phone verification. However, there are options that don’t create tons of friction that subscription services can employ. TeleSign, the world’s first end-to-end communications platform-as-a-service, offers App Verify for iOS, which allows mobile app developers to streamline the onboarding account verification process to help increase conversions, boost cybersecurity and provide identity fraud protection. The platform enables businesses to provide an easy registration process while still protecting their ecosystem from fraudulent activity. Users simply enter their phone numbers, click a button and are verified instantly, thus removing friction, reducing user abandonment and assisting with higher conversions growth.

Only 12 percent of merchants who sign up for a free subscription can access full service once upgraded – think a “freemium” model. For example, subscribers to an Alexa-based Jeopardy!, who already have their payment information on file, are originally given six clues a day through a voice-activated subscription service version of the game. Once they get a taste of the service, they pay a $1.99 per month subscription fee to access a premium version. However, Amazon offers its Prime members an attractive alternative: They can get the premium version of the skill for free.

So, how exactly does Spotify magically sign up so many premium subscribers? Data. “In place of opinion, ego and authority, Spotify works hard to substitute data, experimentation and dialogue about root causes,” according to the Harvard Business Review. As merchants like to say, cash is king – and seemingly, so is data.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.