The transaction value of recurring payments will exceed $15.4trillion globally in 2027 – a slow growth from $13.2trillion in 2023; according to payments market company Juniper Research.
This relatively slow growth of 17 per cent for the recurring payments market indicates how it is already well-established, but also disguises a rapid change of payment methods in the space, with open banking and digital wallet payments overtaking its overall growth.
As merchants struggle to keep their prices as low as possible, offering payment methods with lower processing costs is of critical importance and is driving change, as it is growing consumer enthusiasm for digital payment methods.
Fixed recurring payments involve customers being charged the exact same amount each time a payment leaves their account. A majority of subscription services, such as SVOD (Subscription Video-on-Demand) services like Netflix and Disney+ use fixed recurring payments.
Variable recurring payments can alter in value each time a payment is taken on the basis of the amount of a product or service a customer has actually purchased. Utility bills, such as for water and electricity, or phone contracts are examples of services which are well suited to adopt a variable recurring payment model.
As part of its study, Juniper Research released its latest ‘Competitor Leaderboard for 2023’. Using a robust scoring methodology, the new leaderboard ranked the top 20 recurring payment platforms. To do so, it used criteria such as the completeness of the solutions and the future business prospects of each platform.
The top three platforms highlighted for 2023 were Mollie, Zuora, followed by Recurly in third. The research found that the leading players scored well based on a wide range of integrations with different payment options, alongside tracking and customisable payment plan capabilities.
Juniper suggested that in order to stay ahead of the competition, recurring payments platform vendors must develop solutions that support future-looking payment types as they are developed, such as open banking and CBDCs (Central Bank Digital Currencies), in order to stay relevant in the fast-moving consumer payments space.
Nick Maynard, co-author of the report explained: “For merchants, they want to be able to bill their clients on a recurring or one-off basis, with the ability to create custom plans that match customer requirements, not the system capabilities. Those platform vendors offering an agile, API-based system will best meet these requirements and succeed in this highly competitive market.”