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Home > Finance > Generation Subscriber demands next generation payments

Generation Subscriber demands next generation payments

Published by gbaf mag

Posted on June 17, 2020

5 min read

Last updated: January 21, 2026

Man using QR code payment for cashless transactions in a coffee shop - Global Banking & Finance Review — A man scans a QR code for digital payment in a coffee shop, illustrating the rise of cashless transactions and subscription models in the finance sector. This image reflects the evolving consumer behaviors emphasized in the article about Generation Subscriber.

By Myles Dawson, UK Managing Director, Adyen

The COVID-19 crisis has turned the world on its head, and business conditions are changing almost day-by-day. While many businesses will be feeling the impact of the coronavirus pandemic, there are some that are well placed to deal with this unique situation. One such example is the subscription market.

As expected from many households being placed under lockdown, digital streaming services like Netflix, Amazon Prime and Disney+ have seen huge numbers of new subscribers. Netflix has seen a huge uptick in the number of global subscriptions, with almost 16 million people creating accounts in the first three months of the year, while Disney+ added 22 million new subscribers in two months. But it’s not just the streaming subscription services that have increased. The meal-kit market has also experienced a growth as a result of people staying at home, with brands such as Hello Fresh and Gousto seeing sales and subscriptions soar.

Against a backdrop of COVID-19, many businesses are turning to subscription models in the hope of keeping customers beyond simple one-time purchases, as well as navigating the virtual world that consumers have been forced to adapt to. According to a Subscription Impact Report for COVID-19 released by enterprise software company Zuora, 22.5% of companies are seeing their subscription growth rate accelerate in March compared to the previous 12 months.

While our lives have slowed down, consumer behaviours towards online are changing, and the new generation of consumer – ‘Generation Subscriber’ – has grown as a result. With more and more businesses looking to join the world of Amazon, Spotify, Apple Music and Hello Fresh, it’s important to consider a fit-for-purpose payments infrastructure, to sign-up and retain customers who think ‘digital-first’.

A smooth and flexible checkout process

The first part of the puzzle is to ensure the online checkout process is as frictionless as possible. This is particularly vital at the point a customer signs up, as it’s their first direct experience of the brand. At this point they also need clearly-signposted information such as terms and conditions, how charges are made and cancellation policies. Brands need to get the ‘buy in’ and confidence of the consumer right from the off.

For subscription businesses, who are often trying to quickly build a base of loyal consumers, payments must be quick, easy and secure.

It’s vital that consumers can select from a variety of different payment methods. Customers usually have their own preferences, including debit cards, credit cards, bank transfers and other local systems such as AliPay or WeChat Pay in China and SEPA Direct Debit in mainland Europe.

Subscription businesses also have considerations around recurring payments. In some markets, such as Indonesia, it’s not even possible to set up periodic payments – a challenge that Spotify has overcome by allowing its customers to pay each month using bank transfers or with cash at local convenience stores.

Minimising churn

Involuntary churn – where customers unintentionally have their subscription cancelled due to payment failure – can be a huge source of frustration.

It often occurs when cards expire, are lost, or changed for other unforeseen reasons, triggering a decline in the next payment. Often this happens without the business or customer immediately realising it.

To keep up with their customers, Merchants need instant visibility on these changes, no matter how often, or not, they return. Major card schemes now provide such updates in real time at the time of payment, preventing significant involuntary churn without disrupting the customer experience.

Real time account updates are especially easy to use when paired with tokenisation. Rather than storing sensitive card details, a merchant using tokenisation will store and make payments with a unique ‘token’ number linked to the customer’s card.

Tokens will remain the same, irrespective of any new payment card details. This means fewer false declines and a lower churn rate – with no integration or maintenance required. It also results in the merchant being completely protected against reputational and monetary damages from card breaches, while the payments process is made as simple and as seamless as possible for the customer. Everyone wins.

Protection against fraud

E-commerce-based, subscription businesses are more susceptible to two types of fraud than other merchants: card testing and reseller fraud. Card testing is where fraudsters test stolen details to see if they can be used to make subsequent transactions. Reseller fraud is where fraudsters sign up for trial periods and then sell them on to unsuspecting consumers for small amounts of money. This delivers a negative customer experience and damages brand perception in the process.

The traditional approach to combating fraud is stopping suspicious transactions. But the consequence of doing so often means potentially blocking ‘good’ customers at the same time as ‘bad’ ones.

Instead, subscription businesses should look to use a payments system that can analyse consumers and their spending behaviour in real-time, in order to minimise false positives. Adyen’s Revenue Protect, for example, uses a data-driven approach to block fraud. Features include behavioural analysis, transaction linking, connecting multiple signals into a single profile for every device and custom risk profiles.

In conclusion

The world is increasingly moving towards a subscription-based model – with a broad range of businesses following the entertainment sector’s lead. In this world, customers demand quality, speed, security and – most of all – an uninterrupted, continuous experience. This applies not just to what they buy, but how they pay for it. Simply put, Generation Subscriber demands next generation payments.