Streaming, paying a monthly subscription for: music, e.g. Spotify, for house rent and rates, is well known and accepted by consumers, but will it be ever spread to B2B payment for services?
C2B subscription payments are growing fast
The use of subscription/recurring payment has been growing fast over the last few years. Adyen, the leading multi-channel payments company, have just started to really focus on the subscription market. They have just announced that they have joined forces with Recurly, a subscription management platform, to provide international subscription businesses with new expansion opportunities.
They claim that:
- Through their new integration, subscription businesses can increase worldwide revenue opportunities with a comprehensive range of payment options tailored for global audiences
- Innovative retailers are pushing into new business models to better connect with their community and create a repeat shopping experience associated with their brand, ultimately unlocking new revenue streams.
Recurly and Adyen believe that they provide the flexibility to efficiently scale one-time and recurring payments for subscribers around the world, delivering the best local payment method for multiple markets.
B2B subscription payments
In most supply chains the suppliers and buyers do not change much, and already subscription payments are used for:
- Rent and rates
- Software, e.g. Microsoft Office is, for many users, only avaialble by monthly subscription
- ‘Renting’ TMS, payment hubs
Although, a previous CTMfile post highlighted, how the US corporate treasurers are resistent to direct debiting. Yet US corporates already use recurring payments for several services including those listed above.
Adyen and Recurly believe that “Today's fastest-growing businesses are harnessing the power of subscription commerce to deliver predictable revenue, gain critical market insights and optimise revenue.” Are you missing out?
Benefits of B2B recrring payments
The main benefits of using subscription/recrurring payments are:
- Customers are locked in for fixed periods
- Revenue is predictable
- New customer insights and understanding.
Which raises fundamental questions about current business model:
- Can your service or product be split into recurring and one off payments?
- Would your customers accept subscription payments today? if not now, when and what is needed to make them accept recurring payments?
CTMfile take: The subscription/recurring payments model is going to be used by more and more businesses. It is only a matter of when, not if.
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