Global Subscription and Recurring Payments Market 2023

Global Subscription and Recurring Payments Market 2023

The subscription economy is set to see a surge in growth post COVID-19, with consumers shifting towards subscriptions of physical goods: new yStats.com report

The US market occupies a dominant position in the subscription and recurring payments market.

Consumers worldwide have seen the benefits of the subscription economy in the face of the outbreak of the pandemic. The US market is no exception to this trend, as general subscription e-commerce sales in the US are increasing, with forecasted sales reaching a double-digit value in certain billion US dollars by 2024. Furthermore, the number of digital buyers is also anticipated to increase steadily from 2019 to 2024, with growth rates remaining constant post-2021, as revealed by the latest yStats.com report. The consumer expenditure on the top 100 subscription apps of both the App Store and Google Play also experienced a significant rise in growth rates between 2020 and 2021, with the total consumer spending reaching a new sales high by the end of 2021. In terms of generations, millennials had the highest number of subscriptions as of 2021, with most millennials indicating that they subscribe for convenience and to save money. Furthermore, millennials were also among those who favored new introductory offers and subscription gifting options when compared to other age groups in 2021. With Subscription Video on Demand revenues in the US forecasted to grow at a modest CAGR between 2021 and 2024, the average number of paid music subscriptions also showed acceleration since 2019 and reached a value in the millions as of 2021. Paid subscriptions are continuing to increase in popularity among US consumers, with more than three-quarters of the streaming revenue coming from paid subscriptions as of 2021. In Q4 2021, most households in the US indicated that they had a subscription to a video service, and more than half of the subscribers surveyed had plans to increase their retail subscriptions in the future.

Digital wallets, BNPL, One-click payment, among others are some trends shaping the subscription and recurring payments market, with payment processors adding new recurring payment features.

Due to the growth of the subscription-based business model, recurring payments have become popular among customers and merchants alike. Recurring payments saw a boom mainly due to the acceleration of streaming platforms such as Netflix, Spotify, Amazon Prime, and others. As subscription models are becoming popular even in traditional services such as education, food & beverages, parking lots, among others, companies within these sectors are also implementing recurring payments in their operations. Consumers subscribing to various subscription services demand frictionless methods of payment such as BNPL, digital wallets, and ACH, with ACH gaining popularity due to its cost-efficiency and reliability, as stated in the new yStats.com report. There is also a rise in demand for faster payment options such as biometric and crypto payments, along with one-click payments and auto-renewal of subscriptions.