The market for subscription payments is exploding: Your customers can now subscribe with Apple Pay!
Subscription POV #32
By Morten Suhr Hansen
Disclaimer! This article can come off as extremely geeky and boring. But if you’re running a subscription business, you should pay close attention for the next five minutes, because payment methods are extremely important for Customer Acquisition.
It’s worth noting that Apple has finally opened recurring payments through Apple Pay, making it possible to pay for subscriptions through Apple Pay.
Considering how widespread Apple Pay generally is in Denmark, I believe that the new subscription payment option will be a huge success in Denmark. However, only if Danish subscription companies take advantage of the opportunity. The subscription payment platform Reepay now offers the solution as the first to their customers. And others will follow.
Apple Pay has already taken the market for mobile payments
Earlier this year, the National Bank of Denmark issued a large survey on mobile payments in 2021. It showed that Apple Pay is the largest by far for mobile payments for physical shopping. 186 million times Apple Pay was used, correlating to 42% of ALL mobile payments. In 2019 the same number was just 37 million. This also means that Apple Pay laid more distance to MobilePay, facilitating 22% of payments.
These numbers are thought provoking, since only 18% of Danes had Apple Pay installed in 2021, where 92% had MobilePay installed. But the convenience that lies in just tapping your phone against the payment terminal (NFC) has proved to be decisive in stores.
In digital e-commerce it looks a little different. Here, MobilePay has taken a strong position as the preferred payment solution when checking out online. This is in part because you are free from the annoying two-factor identification when using Mobilepay instead of a traditional payment card.
Mobilepay Subscriptions is winning market share on subscription payments
Også på markedet for abonnementsbetalinger har MobilePay taget en stærk position med deres abonnementsløsning, MobilePay Subscriptions. Langt fra alle digitale abonnementsløsninger tilbyder endnu MobilePay Subscriptions, men de, der gør, oplever en stor tilslutning fra deres kunder, som typisk oplever at ’sign-up’ processen er væsentlig lettere. Det betyder faktisk også, at mange oplever, at det samlede salg (konverteringen) stiger, når de tilbyder MobilePay Subscriptions som betalingsløsning. Det kan virke overraskende, men er igen et udtryk for, hvor vigtig ’convenience’ er for kunderne, også når de skal købe et abonnement.
In the market for subscription payments, MobilePay has taken a strong position with MobilePay Subscriptions. Far from all subscriptions offer MobilePay Subscriptions, but those who do experience a large amount of customers choosing it, since it makes the sign-up process much easier. This also means that many experience increased sales when offering MobilePay Subscriptions as a payment solution.
The million dollar question is if MobilePay can hold onto their strong growth and position, now that Apple Pay is moving into the market of payment solutions?
Apple Pay Recurring Payments comes with some of the same, obvious advantages as MobilePay Subscriptions. Especially the fact that you go around the aforementioned two-factor identification. In other words, Apple offers as easy a purchasing experience as MobilePay Subscriptions, with the advantage that you don’t need a phone number and a swipe, you just need to activate via your Apple device.
We have to remember that it is far from everyone who has access to Apple Pay. It does require an Apple unit. But for all Android users there is Google Pay, who also offers a subscription payment function. In Denmark, however, Google Pay is still a small player.
Which payment method should you choose for your subscription company?
So what does all this mean for you who runs a subscription business? Which payment methods should you offer? That is the important question.
First and foremost, you should offer customers the easiest access to buying your subscription. It affects the conversion in a positive way, since more and more people buy a subscription on a mobile device. Two-factor identification on an iPhone is just not really convenient!
Economy could play a role here as well. Subscription payments via Apple Pay do not cost more than regular card payments and Apple Pay already supports the Danish DanCard, which should bring costs down even more.
However, Apple Pay can’t stand alone all the while it’s far from all users who have access to this form of payment. Here, MobilePay Subscriptions has a clear advantage in Denmark. Internationally, however, it looks quite different. Here, Apple Pay and Google Pay are the right solutions.
Regardless, the market for payments are evolving quickly. It’s worth following it heavily. Fortunately, it’s moving in the right direction for subscription companies and their customers.