Subscription is a revenue stream that will help you build long-term customer relationships.
What is a subscription?
Subscription is a business model where instead of letting the customer make a one-time purchase, you provide them an opportunity to subscribe to the items you sell. Also, there is an option to choose between varied periods, such as daily, weekly, monthly, or yearly. Subscription payment creates a win-win situation for both the shopper and the store owner.
Subscription targets repeated purchases and this, in turn, boosts sales.
That’s why the implementation of this approach significantly helps to improve the user experience. As a Magento merchant, you get the most convenient way to accept recurring payments. Furthermore, repetitive purchases mean that you get regular customers.
As for Magento 2, it doesn’t include any subscription or recurring payment functionality by default. It might change in the future, but using third-party extensions is inevitable if you want to accept regular payments.
Benefits of subscription
Subscription & Recurring Payments for Magento 2 is a great tool that helps you take advantage of the subscription model. The extension allows customers to subscribe to any product – they will be able to automatically reorder the products in a specific interval, and an amount of money will automatically be deducted from their account.
What benefits do you get with a subscription for your store:
- Increase profits by transforming single sales into recurring sales;
- Maintain cost-effectiveness by reducing client acquisition expenses;
- Incentivize new purchases by offering discounts;
Users usually choose stores that offer a variety of payment options. As a result, engaging visitors in recurring payments is more accessible if your Magento 2 store can choose trustworthy transaction providers like Stripe, PayPal, and Authorize.net.
Anyone who processes credit card data must follow the Payment Card Industry Data Security Standards (PCI DSS). The Subscription and Recurring Payment module for Magento 2 transmit important data directly to the payment processor without passing through your servers. This way, you can be sure that the customer’s credit card information is fully protected.
Three payment methods are supported, including PayPal, Authorize.net, and Stripe.
Clients can also access the “My Subscriptions” section of their account dashboard to see what they are signing up for. They will be able to see their current and past subscriptions. Customers can select to renew, suspend, or cancel these plans.
- The customer using Stripe must enter the credit card number to place orders. This payment method uses the iframe form provided by Stripe. No customer data is entered and stored on the Magento server. After the checkout is complete, only tokens are stored on the Magento server. It is eligible for PCI SAQ A level.
- When choosing PayPal, the customer will be redirected to the PayPal website to continue the checkout. Customer data is entered directly into the PayPal server. No customer data is entered or stored on the Magento server. After the checkout is complete, only tokens are stored on the Magento server. It is eligible for PCI SAQ A level.
- In Authorize.net the customer will enter the card info in the Magento checkout form and send this data to the payment gateway. No customer data is entered or stored on the Magento server. After the checkout is complete, only tokens are stored on the Magento server. It is eligible for PCI SAQ A-EP* level.
Why do you need a subscription?
What makes the Subscription model a success for eCommerce stores? Buyers love the Magento 2 subscription because it saves them time. It gives customers a respite since they know what they are subscribing to will be received automatically.
Subscriptions are usually lower than regular products. Price is indeed the top priority. When clients know they are receiving the same quality product at a more affordable price, they are happy, which motivates them to register.
Subscription management lets customers manage their finances as well. For example, they can see how much they’re going to spend in the future, which works quite well for them too. A better overall buying experience improves sales and, as a result, business income. Moreover, subscriptions reduce the probability of the buyer switching to a competing brand.
The eCommerce business on the Internet is growing, making it even harder to attract new customers. The cost of marketing is going up, and it takes months or years to get regular sales. Staying in competition and being profitable is the essence of any business.
In this post, we introduced you to the subscription and recurring payment extension available in Magento 2 now. If you have some questions about it, you can contact us.