subscription and recurring payment has experienced incredible growth in recent years and is becoming a dominant business model across many industries. From streaming services to fitness clubs to software-as-a-service, consumers are increasingly using recurring payment models to access goods and services on a regular basis. This sea change in the way we consume has been driven by convenience for customers and predictability for companies.

The Subscription Economy

According to a report by McKinsey, the subscription economy generated at least $154 billion in revenue for the United States in 2018 alone across industries like media and entertainment, online services, commerce, and food. Forecasts predict this number will continue growing exponentially as more businesses explore the subscription model and customers get used to paying regularly for access rather than outright ownership.

Some key industries where subscriptions have taken off include:

– Streaming Media: Services like Netflix, Spotify, Disney+, and Hulu now have over 500 million subscribers globally paying monthly or annual fees for on-demand access to movies, TV shows, music. Streaming allows people to cut the cord on expensive cable packages while still enjoying endless entertainment.

– Software-as-a-Service: Cloud-based productivity and business tools from Microsoft, Salesforce, Adobe, and many others are almost entirely subscription-based now. Businesses prefer the flexibility and low upfront costs of the recurring payment model for tools they need to use long-term.

– Online Publications: Digital versions of magazines and newspapers from The New York Times to Wired to The Economist have embraced subscriptions as print readership declines. Reliable monthly income allows them to invest in quality journalism.

– Meal Kits: Services like HelloFresh, Blue Apron, and EveryPlate ship pre-portioned ingredients and recipes for home-cooked meals on a weekly subscription basis. The convenience is attracting many time-strapped consumers.

– Online Memberships: Sites offering dating, lending clubs, professional networks, dating and more rely on subscriptions as their core business model to facilitate ongoing connections and benefits for users.

For consumers, the flexibility and low commitment of monthly subscriptions makes it easy to try new services and cancel those that aren’t working out. But for businesses, the dependable recurring cash flow allows for careful budgeting and long-term growth planning. This symbiosis is fueling unprecedented success for the subscription economy across sectors.

Processing Subscriptions and Recurring Payments

For businesses built entirely on subscriptions, processing recurring online payments is a core function that requires specialized tools. Some key considerations for companies include:

– Payment Collection: Integrating payment gateways and software that can securely collect debit/credit card details and process recurring monthly/annual transactions with reliability.

– Authorization Management: Managing the authorization process for subscriptions, keeping track of active/canceled authorizations, and alerting customers before processing renewals.

– Auditing & Reconciliation: Reconciling subscription payment activity, tracking cancellations/refunds, and auditing payments to improve cash flow management.

– Flexible Plans & Pricing: Building plans with tiered pricing, trials, bundles, and the ability to upgrade/downgrade at any time with prorated adjustments.

– Customer Support: Providing 24/7 online support for payment issues, cancellations, refunds and account queries. This requires integrating customer relationship management tools.

Leading providers like Stripe, Braintree by PayPal, and Recurly offer robust APIs and software for building recurring payment workflows tailored to SaaS and subscription business needs. Their tools facilitate everything from initial signups to managing ongoing subscriptions with ease. With recurring revenues being