45 percent of UK consumers prefer Direct Debit for subscription payments

The research found that almost half of UK consumers (45%) were likely to choose Direct Debit to pay for online subscriptions, compared to almost a third (32%) who were likely to choose debit card. However, in a snapshot view of 29 top subscription websites in the UK including Amazon Prime, HelloFresh, and Spotify, none of them currently offers customers the option of Direct Debit. In contrast, 100% offer credit/debit card, 62% offer PayPal, and 3% accept mobile payments.

The research also found that:

• 19% of UK consumers were likely to pay by credit cards for online subscriptions, and 16% by digital wallets;

• 43% of UK consumers were ‘very unlikely’ to use credit cards to make any kind of recurring purchase online;

• for traditional subscriptions, 48% of UK consumers would prefer paying with Direct Debit, compared to a third (33%) who were likely to choose debit card, and 12% who would opt for a digital wallet;

• for household bills – 47% of UK consumers said they were likely to pay using Direct Debit; 54% were ‘very unlikely’ to do so with digital wallets;

• for instalment payments – 52% of UK consumers said they were likely to choose Direct Debit compared to 32% for debit cards, 21% for credit cards, and 11% for digital wallets.

GoCardless went onto survey 12,785 consumers in countries accounting for two-thirds of the global volume of recurring payments (the UK, France, Germany, Spain, Denmark, Sweden, the US, Canada, Australia, New Zealand). Globally, variation in payments preferences has as much to do with culture as technology. For example, in the US cheque is still a popular payment method when paying regular household bills. In Germany cash is still king as 40% are ‘very unlikely’ to use credit cards and 29% feel the same about debit cards.

One unifying theme however was that more than 30% of consumers globally were likely to choose Direct/Bank Debit to pay for online subscriptions in the majority of international markets (9/10) – North America being the only exception (19%).