Consumers have developed an increased appetite for subscription services, and they may well be pleased with the convenience these services provide, but a large part of keeping that experience positive hinges on seamless payments.
Unfortunately, hiccups during the payments process are far from unusual. In fact, 27% of consumers who subscribed to a broad range of services report that they experienced a payment decline or payment-related issue in the last 12 months, according to Optimizing Subscription Payments, a PYMNTS and FlexPay collaboration that surveyed 2,195 U.S. consumers.
Subscribers to two types of services are especially likely to report having to contend with these issues, with 45% of consumer services subscribers reporting problems in the past 12 months.
Even among subscription types experiencing the lowest percentage of problems — media streaming and music streaming — about a quarter of consumers still reported having experiences with declined payments over the past year.
Not surprisingly, payment declines can significantly affect subscribers’ satisfaction with their service providers. Thirty-five percent of subscribers say the decline decreased their level of satisfaction with the subscription provider.
Among those who let the subscription terminate after a declined payment, 53% say the decline decreased their level of satisfaction, while 43% of consumers said they let the subscription expire or switched to the competition as a result. Even among those who updated their payment information, 29% say the experience decreased their level of satisfaction with the service provider.
Notably, a declined payment can also be an opportunity for some businesses to “turn lemons into lemonade,” so to speak, as some customers said the decline increased their level of satisfaction with the subscription provider. That was the case for 20% of those who updated their payment information, while 36% of those who switched to the competition said the decline increased their level of satisfaction with the first provider.