There is no doubt that people prefer the convenience of accessing their favourite services or products at any time, anywhere. Few could imagine going back to a life without binge-watching Netflix, creating Spotify playlists, or backing up files on Dropbox, Drive, or iCloud.
However, there is a flipside to subscriptions and recurring payments. The explosive growth of subscription services has made people lose track of how much they pay, to whom they pay, and when they pay.
A 2019 study from Minna Technologies, including more than 400 000 European consumers between the ages of 18 and 75, shows that the average person spends €334 on at least 11 different subscription services each month. Moreover, the study found that the average household pays for a total of 21 subscription services.
Given these findings, it is understandable that people find it challenging to maintain control over their recurring expenses. As the number of subscriptions are increasing, consumers are likely to become even more frustrated.
Minna’s findings underscore the magnitude of consumers’ frustration. For instance, 1 in 3 said they had found themselves paying for subscriptions they no longer use. Without knowing it, customers found that subscription companies had been charging their cards for months, and in some cases, years. The most common reason for this was free trials that had ended and subsequently started charging money, without notice.
Moreover, 74% of customers pointed out that cancellation is the most frustrating part about subscriptions, and described the experience of cancelling a subscription over the phone as “extremely painful”. In fact, the bare realization that there might be a salesperson on the other end of the phone, trying to convince them to not cancel, caused many not to go through with the cancellation in the first place.
Lastly, the study found that 33% of consumer are aware that better subscription alternatives exist (such as cheaper telco- or utility deals), but did not change them as they did neither have time or energy to compare and switch provider.
These findings clearly suggest that consumers need help managing their subscription services. To find out more, download our report ‘Opportunities for banks in the subscription economy’.