All heads are turned again towards the UK-based challenger bank Revolut, and rightfully so. Revolut, the poster child for innovation and vision on what a bank can be, has launched their self-built subscription management feature.
Known for being one of the main trailblazers on the market, Revolut now has another ace up their sleeve. Their newly launched subscription management feature. Neither of it’s direct UK competitors, Monzo and Starling, nor often compared to Revolut Germany-based neobank N26 offer subscription management as of yet.
At the same time, the subscription economy is growing exponentially. The possibility of managing and cancelling recurring payments becomes more sought after by the bank customers than ever before.
According to Business Insider Intelligence’s UK Mobile Banking Competitive Edge Study 2020, 38% of mobile banking users who took part in it deemed the feature ‘extremely valuable’, voting it the most-valued digital money management feature.
Subscription Management. The benefits for the bank and its customers
In a 2018 study by Cicero Consulting, it was also observed that up to 37% of respondents wanted a subscription management feature on their banking app. These seem to be particularly high numbers considering this feature is not yet widely known in the European market.
The numbers will only continue to climb as more people become convinced of the advantages and safety levels of using such a platform… and more and more banks want to step up their game and join the subscription management club. A club that already includes launches from the biggest banks in the Nordics: Nordea, Swedbank, Lunar, Danske Bank and ABN AMRO.
How does Revolut tackle the subscription management service?
Subscription management basically consists of three parts: the overview, the notification and the cancellation.
The recurring payments and direct debits made using Revolut cards are now visible under the ‘Subscription’ feature in the app. There’s crowdsourcing involved in the detection mechanism, which means that users are able to flag recurring payments undetected by the app. They can block and unblock payments for each subscription. They will also be notified when the funds on the account are insufficient to cover the nearest payment.
Getting the full overview of all your recurring payments is one part of the subscription management feature. But it’s a crucial part of the service to get right. If the subscription management service is not able to find all the correct recurring payments, then the user will not use the feature. They simply don’t trust the service. From a bank customer’s perspective, you also want to manage these payments from the same interface. This can be by pausing, canceling or even negotiating with the subscription providers.
Getting out of a subscription from the same interface with a few clicks provides great value to the users. It’s not hard to imagine why, given all the hoops you sometimes have to jump through to get out of one. Dark patterns, confusing UX, waiting in line to customer service for hours are unfortunately a common experience shared by millions of users. Customers need a helping hand and the banks have to step in and offer one. Subscription management is an obvious solution, and Revolut joining the crowd here is a great thing for the users and for the market alike, expanding the awareness of the subscription economy with its issues and challenges.
Why is cancelling the payments important?
It’s worth noting that cancelling the payment only is not actually cancelling the subscription. Far from it. To be clear, a subscription consists of two equal parts:
1. The payment between the user and the subscription company.
2. The contract between the user and the subscription company.
By entering a legally binding agreement with a subscription provider the user is tied up to an agreement. They will have to terminate the agreement to terminate the subscription. It is not enough to only cancel the payment.
Failing to terminate the agreement would be like not paying your electricity bill, with the same legal consequences.
Why is the cancellation part difficult to include in a subscription management feature?
Cancelling a subscription in the shape of cancelling both the payment and the contract can be a tedious process. It requires expertise in a very narrow field as many subscription companies are asking for different things. The local fitness club might ask for the user’s address, the newspaper might ask for the last four digits of the user’s credit card and the global streaming service might just need an email address. Put on top of this that there is also local legislation that you need to take into account.
These hurdles need to be overcome by the subscription management service to truly create value for the users. In some cases to get there it requires human resources, often at a scale, and systems to handle the cancellation processes. When you serve different markets, even within the almost homogenous, one could say, European Union, the patterns, behaviours and habits around subscription cancelling policies are different.
More often than not you have to engage in lengthy conversations with the service providers and monitor all the stages of cancellation for every single one of them.
To handle and process cancellations and communicate with the providers is a crucially important part of the subscription management feature, alongside the overview and the notifications. These three components are needed for your customers to be aware of the product given to them.
Revolut, as always, did a great job. It feels great to have such a brand noticing the need and giving their customers the ability to manage subscriptions. We are waiting impatiently to see how the newly launched feature will develop further in the future. Let’s give the users control of their subscriptions! Find out exactly how it works here.