SUBSCRIPTION AND RECURRING PAYMENT MARKET SIZE & SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Subscription and Recurring Payment Market size is expected to reach US$ 505.46 Billion by 2030, from US$ 154.05 Billion in 2023, at a CAGR of 18.5% during the forecast period. Subscription and recurring payments refer to automated billing cycles where payments for products or services are deducted directly by a merchant on a preset scheduled basis. It provides predictable recurring revenue streams for merchants. The Subscription and Recurring Payment Market is segmented by payment mode, organization size, vertical, deployment, and component. By payment mode, the market is segmented into cards, net banking, mobile wallets, and others. Cards remain the most widely used payment method, owing to the high adoption of debit and credit cards globally.

Subscription and Recurring Payment Market Regional Insights

North America is expected to be the largest market for Subscription and Recurring Payment Market during the forecast period, accounting for over 40% of the market share in 2022. The growth of the market in North America is attributed to the high penetration of digital payments and subscription models.

The Europe market is expected to be the second-largest market for Subscription and Recurring Payment Market, accounting for over 25% of the market share in 2022. The growth of the market in Europe is attributed to rising e-commerce sales and adoption of recurring payments among SMEs.

The Asia Pacific market is expected to be the fastest-growing market for Subscription and Recurring Payment Market, with a CAGR of over 20% during the forecast period. The growth of the market in Asia Pacific is attributed to increasing smartphone penetration and digital payment adoption.

Figure 1. Global Subscription and Recurring Payment Market Share (%), by Region, 2023

Subscription and Recurring Payment Market Drivers:

Shift Towards Subscription Business Models - The shift from one-time purchases to subscription business models across industries is driving the recurring payments market growth. Subscription video streaming services like Netflix and Amazon Prime have gained immense popularity.

Growing E-Commerce Industry - The rapid growth in global e-commerce sales and popularity of subscription-based purchase models on e-commerce platforms is boosting the adoption of recurring payment solutions.

Increase in Recurring Payments Adoption Among SMEs - SMEs are increasingly adopting recurring payment solutions as it provides them with predictable revenue streams. The solutions also reduce involuntary churn and minimize revenue leakage.

Emergence of Alternative Payment Methods - The emergence of alternative payment methods like mobile wallets, P2P payments, and BNPL is contributing to the market growth as they can be integrated with recurring payment platforms.

Favorable Government Initiatives - Initiatives by governments across countries to promote digital payments provides significant growth opportunities to recurring payment service providers.

Subscription and Recurring Payment Market Opportunities:

Innovation in Recurring Payments Technology - Emerging technologies like AI, blockchain, and open banking APIs provides opportunities for recurring payment providers to innovate their platforms and improve customer experience.

Recurring Payments for IoT - The growth of IoT and connected devices provides an opportunity to implement automated recurring payments for various IoT services and subscriptions.

Cross-border Recurring Payments - Expanding cross-border recurring payments would allow businesses to tap international markets. Simplifying cross-border payments remains an area of opportunity.

Recurring Payments for Embedded Finance - Collaboration with fintech and embedded finance can help expand recurring billing and payments across different platforms and apps.

Subscription and Recurring Payment Market Trends:

Integration of Recurring Payments with ERP Systems - Integration of recurring payments with ERP and accounting systems enables automated reconciliation and enhances operational efficiency.

Self-serve Recurring Payments Platforms - Providers are focusing on DIY recurring payment platforms with self-serve capabilities targeted at SMEs and mid-market firms.

Personalized Subscription Offerings - Customizable subscription plans and personalized pricing strategies based on customer preferences is an emerging trend.

Focus on Subscription Management Capabilities - Advanced subscription management capabilities like automated renewals, waitlists, and subscription pausing are gaining prominence.

Emphasis on Subscription Analytics - Providers are offering data analytics on metrics like subscriber cohorts, churn rate, and LTV to merchants to improve customer retention.

Subscription and Recurring Payment Market Restraints:

Security and Compliance Concerns - Data privacy issues and vulnerabilities like recurring payment frauds restrict consumer confidence and hinder market growth.

Complexities in Cross-border Recurring Payments - Challenges associated with processing cross-border recurring payments like currency conversions, taxes, and global regulations hampers growth.

Required Changes in Legacy Systems - Transitioning from legacy payment systems to automated recurring platforms involves operational challenges for established enterprises.

Recent Developments

New product launches

Product Launch 1: In June 2022, Paymentology, a leading provider of recurring payment solutions, announced the launch of its Automated Accounts Receivable (AR) Payment Solution designed specifically for property management companies.

Product Launch 2: In January 2022, Chargebee launched Chargebee Payments facilitating global subscription businesses to collect instant recurring payments using a payment method optimized for their customers.

Product Launch 3: In September 2021, GoCardless launched Recur 360, an end-to-end recurring payment solution providing merchant-facing tools and insights coupled with bank-grade security.

Acquisition and partnerships

In October 2022, Payment Depot acquired AVG to expand its payment processing capabilities into the subscription management and recurring billing space.

In May 2022, Chargebee partnered with Metomic providing deeper payment insights to merchants by combining subscription analytics from Chargebee with Metomic's financial data intelligence.

In April 2022, Pod Charge, a leading EV charging payment solution, announced its partnership with Stripe to power frictionless pay-as-you-go and subscription-based payments for EV charging.

Figure 2. Global Subscription and Recurring Payment Market Share (%), By Component, 2023

Top companies in Subscription and Recurring Payment Market

• PayPal
• Stripe
• Square
• Recurly
• Chargify
• Zuora
• FattMerchant
• Payment Depot
• PaymentEvolution
• FastSpring
• Chargebee
• Spreedly
• ChargeOver
• Chargent
• Vindicia
• Chargify
• Razorpay
• Cashfree
• CCAvenue
• BillDesk

*Definition: The Subscription and Recurring Payment Market refers to the solutions, services, and technologies that enable merchants and businesses to accept automated recurring payments from customers for continued access to products or services. It includes online payment gateways, billing and invoicing software, subscription management platforms, payment analytics tools, and other systems that facilitate recurring billing and payments on a scheduled basis.