While the likes of Amazon and Spotify allow long-standing debit and credit card payments, new GoCardless research suggests they’re missing out on customers’ favourite payment method
From PayPal to digital wallets, customers have an increasing variety of options to fork out money for online subscriptions and depart from traditional debit and credit cards. However, it seems one of the most popular methods isn’t being picked up by major subscription sites.
Surveyeing 12,785 consumers across ten nations, GoCardless, the payment platform, found 45% of British customers are likely to pick direct debit for online subscriptions. This makes it the far most popular payment option as only 33% opted to use their debit cards and 12% selected digital wallets as their top choice.
However, despite consumers‘ preference for direct debit, GoCardless found that none of 29 prominent subscription sites – including Amazon Prime, HelloFresh and Spotify – offer direct debit as a payment method. Instead, 100% take credit or debit cards, 62% support PayPal and 3% accept mobile payments.
This is despite the fact 43% of respondents said they’re very unlikely to choose credit cards for any type of recurring online payment, with only 19% admitting they’re likely to use it for online subscriptions.
Moreover, 52% would use direct debit for instalment payments over 32% using debit cards, 21% picking credit cards and 11% choosing digital wallets. This is on top of 47% preferring direct debit for household bills.
Commenting on the disparity, Hiroki Takeuchi, CEO of GoCardless, said: “Payment preferences can have a huge impact on checkout conversion, especially for subscription businesses. There is no one-size-fits-all-solution but businesses must understand that choice is crucial if they want to continue to appeal to consumers. If you fail to offer the most relevant options for recurring payments, customers will walk away.”
Given the results of this research, it’s clear businesses must think long and hard before rejecting direct debit as a viable option to receive payments from customers.