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Market Overview:
The subscription and recurring payment market deals with the transaction processing of subscription and recurring billing. It refers to the automated billing system where buyers pay fixed amounts periodically for goods and services provided on a continuing basis. The subscription model offers many benefits to both businesses and consumers. For businesses, it provides predictable cash flow and increases customer lifetime value. For consumers, it delivers hassle-free access to useful goods and services at affordable prices. Some common subscription-based services include video and music streaming, web hosting, cloud storage, newspaper/magazine subscriptions, gym memberships, etc. With evolving customer preferences toward recurring payments, the demand for subscription and payment processing solutions is growing substantially.
The global Subscription and Recurring Payment Market is estimated to be valued at US$ 154.05 Bn in 2023 and is expected to exhibit a CAGR of 18% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the market is the rising adoption of subscription models across various industries. Industries like media & entertainment, e-commerce, and healthcare have widely embraced subscription models to monetize digital content and services. Another major trend is the growing customer preference for digital and contactless payment methods. This has provided a thrust to subscription commerce as digital payments simplify recurring transactions. Furthermore, innovations in subscription billing and recurring payment technologies are supporting personalized and flexible pricing options. This is driving the demand for sophisticated subscription management platforms. Improved internet and smartphone penetration globally has also expanded the customer reach of subscription-based businesses.
Key players operating in the subscription and recurring payment market are
PayPal, Stripe, Square, Recurly, Chargify, Zuora, FattMerchant, Payment Depot, PaymentEvolution, FastSpring, Chargebee, Spreedly, ChargeOver, Chargent, Vindicia, Chargify, Razorpay, Cashfree, CCAvenue, BillDesk. PayPal dominates the global market owing to its well-established brand presence and robust payment gateway offerings. Stripe is growing rapidly due to its customizable solutions and services catering to various industries.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the subscription and recurring payment market requires significant investment in technology infrastructure and partnerships with various merchants and vendors.
Bargaining power of buyers: The bargaining power of buyers is moderate as buyers have multiple options to choose from in terms of payment gateways and platforms. However, switching costs are low.
Bargaining power of suppliers: The bargaining power of suppliers is low given the presence of many technology companies offering competitive payment solutions.
Threat of new substitutes: The threat of new substitutes is high as alternative payment methods like one-time payments, cash, etc. continue to pose a threat to recurring payments.
Competitive rivalry: The competitive rivalry in the subscription and recurring payment market is high considering the presence of major established players.
Key Takeaways
The global subscription and recurring payment market is expected to witness high growth, exhibiting CAGR of 18.% over the forecast period, due to increasing adoption of subscription models across various industries like media & entertainment, healthcare, online services etc.
The North America subscription and recurring payment market is expected to dominate with the largest market share owing to high penetration of digitization and presence of major players in the US and Canada. Asia Pacific region is expected to showcase the highest growth rate during the forecast period due to growing e-commerce industry, rising internet penetration and adoption of cashless transactions in emerging economies of China and India.
