Jennifer Acosta

Global Head of Media and Telecommunications, J.P. Morgan Payments

Andrew Keighery

Head of Business Development, TMT E-Commerce Solutions

Subscription models are a popular way for consumers to pay for many goods and services in the future of shopping. They’ve become the standard for services like video and music streaming, but they’re also gaining popularity within markets like retail and software as more businesses seek subscription-related benefits like recurring revenue streams. As more players enter the space, companies must adopt innovations to entice consumers and optimize their business practices. One way to stay competitive and stand out from the pack is through adopting a topnotch payments strategy. Below are three areas where payments can help subscription services with a few specific examples in each.

Elevate onboarding experiences

Make sign-up simple

It’s critical that subscription services offer a frictionless sign-up experience for potential customers. Modern customers abandon sign-ups with too many pain points, which can reduce subscribers and revenue. Businesses should also ensure sign-up happens on the same website or page, occurs in the fewest possible steps, and eliminates possibilities that could result in an unnecessary error or declined payment. The experience should allow consumers to auto-populate previously-stored information from a web browser, phone or digital wallet. Finally, it should accept relevant payment methods within the subscriber’s geography (i.e., card isn’t a common payment method in some countries).

Make sign-up safe

Streaming companies will want to mitigate fraud risks and the associated financial and reputational costs with best-in-class security features. Sign-up is a perfect opportunity to incorporate preventative measures to stop fraud before it starts, and businesses that implement and promote some of the below features can elevate their service’s perception among new users:

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    Minimize fraudulent sign-ups:

    Comprehensive fraud controls can prevent suspicious sign-ups by ensuring each one is automatically reviewed for specific criterion through automatic safeguards. 

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    Protect data:

    Businesses with subscription models maintain a significant amount of consumer payment data to charge recurring subscriptions — particularly as open banking expands. They can mitigate risks through tokenization, which at its simplest level replaces card information with alternative numbers. Fraudsters that hack or steal information obtain a meaningless string of numbers rather than sensitive information like a consumer’s credit card number. 

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    Fortify accounts:

    Businesses will also want to prevent fraudsters from taking over a consumer account, and one way to prevent this is through auto-enrolling customers into multifactor authentication with a provided email or phone number. Customers can then verify their identity before activities that require particular security, like logging into a new device or changing a payment method.  

Enhance ongoing needs

Make managing payments and subscriptions a breeze

Consumers expect to easily find and change their subscription whenever needed. That means adjusting a payment method should be as seamless as during onboarding. They should also be able to easily pause or cancel a subscription, and while this can hurt short-term revenue, it builds trust with your subscriber, which increases the likelihood that they’ll return.

Services should also have the payments infrastructure to immediately recognize when a preexisting recurring payment is denied. Sometimes subscribers will lock or discontinue a credit card without remembering its impact to their subscriptions, and a cumbersome update experience can create inertia that ultimately loses the customer. Subscription services should proactively email or text customers when the charge is denied and provide a link that customers can use to renew payment information in a few steps.

Use loyalty to develop new revenue streams

One benefit of subscription models is a particularly loyal fan base, and these services should identify how payments can deepen loyalty. For example, these services can partner with credit card companies to offer high rewards when consumers pay with their cards. They can also create a compelling rewards program where consumers that review content earn rewards to purchase relevant products (e.g., a sound bar for a video streaming platform). These services can use payments developments like open-loop reward networks to maximize their effectiveness.

Building loyalty is essential to further monetize subscribers. One low-hanging fruit opportunity is upselling customers with content add-ons, like creating an experience for customers to stream music on a separate card-specific account.  But even bigger opportunities exist. For instance, some streaming services are part of larger businesses with cross-selling opportunities, like theme park discounts or product promotions. Since streaming services already have their subscriber’s payment information, cross-selling becomes a frictionless opportunity to generate additional revenue.

Building loyalty is essential to further monetize subscribers

Support scalable businesses

Create a cross-border treasury solution

Consumers increasingly demand content or products from subscription services on a global sale. To offer an international service, treasurers must support returns, currency exchanges, pricing, and other factors that become increasingly complex with scale. Given the ongoing success of platform-based business models, treasurers must also broaden the scope of their corporate cash beyond their boundaries to include third-party money (e.g., other people’s money from wallets and loyalty programs). It’s critical to have an overall cross-currency solution to send and receive payments in many currencies and manage all these processes on one platform.

A cross-currency solution should also take advantage of cutting-edge technologies. APIs can provide real-time visibility into FX rates to manage currency exposure, and they minimize how often developers must write new code from scratch. Multicurrency national pools can enable e2e currency management. Virtual accounts can consolidate your local accounts to one per market among other benefits while client money and sponsored accounts enable safeguarding and client liquidity management. Real-time payments and blockchain can also support instantaneous transaction processing, improve transparency, automate process flows, and reduce intermediaries and manual processes.

Choose a comprehensive provider

It’s critical that your payments provider can accept, process, and send payments in addition to manage funds. Most providers only support some of these tasks and outsource others, which results in a payments infrastructure that resembles a complex web or interconnected provider activities. Businesses that avoid this structure reap some key benefits discussed below:

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    Error reduction:

    It’s easier for one point in a web of multiple providers to break, and it takes longer to isolate and resolve these issues. Both of these factors can result in higher costs such as for customer support fielding incoming questions about product malfunctions.  

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    Increased security:

    Multiple partners accessing and transmitting data increases the opportunities for fraudsters to hack into your systems and gather data.

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    Better customer insights:

    By working with a comprehensive payments provider, you can better access and mine data because one provider has information across the entire payment lifecycle. 

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    Developer flexibility:

    Providers can offer more flexible services and configurations to developers when they own all aspects of a payment platform. With less fragmented solutions, developers will also benefit from working on platforms with more global consistency, resiliency, and scale. 

A comprehensive provider also gives you a single place to turn when the unexpected happens. Having a follow-the-sun service model and geographically-dispersed team with a consistent view of your company can help create a best-in-class support system and a streamlined experience.

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The statements herein are confidential and proprietary and not intended to be legally binding. Not all products and services are available in all geographical areas. Visit for further disclosures and disclaimers related to this content.