When we talk about Subscription
payments in Nigeria, the first thing that comes to mind is DSTV, GoTV and our Internet
bundle plans.
While all these are various forms of subscription payment
that have existed over the years, we have new forms of subscription payments across different business sectors.
Different companies have
already adopted the subscription payment method offering their services in form
of a subscription where customers select the subscription they are most
comfortable with maybe one that’s within their budget and the business is done
that way.
One of them is electricity subscription payment, which
basically means paying your electricity bills online.
Subscription payments can also be referred to as recurring
payments.
What is Subscription Payment?
Subscription payment or recurring payment is a system that enables customers to pay and use a service over a
period of time which can be daily, weekly, monthly or yearly.
This is different from the usual and widely used pay-as-you-go system in which customers just
make a one-time payment for a product and that’s it.
Example: You buy
a laptop or a smartphone, which is a
one-time payment for a single product.
How does Subscription Payment actually work?
So what’s the process around making Subscription payments
and how does it actually work?
It all begins with the customer-he or she selects the
subscription plan or package of his choice. An agreement
is then signed and payment is made for the first cycle.
Let’s assume the customer
opted for a one-month plan, he makes payment for that month and gets access to
the service he paid for. This is the first cycle of subscription payment.
The next cycle or phase is at
the end of the month he paid for until renewal for another - enabling the
continued use of that service.
Now, the customer doesn’t
have to go anywhere or do anything. The merchant or seller automatically
charges the customer for the same one-month subscription package selected a
month ago extending or renewing his plan.
Select plan – Pay – Automatic
charge - Pay.
Benefits of using Subscription payments in
Nigeria
Some of us are currently subscribed to one or two plans or packages either consciously or unconsciously because subscription payments are becoming so powerful, they have been
integrated into our society making things easier for buyers and sellers.
The main benefit of any subscription payment is convenience.
Convenience
Subscription payments help save buyers’ time, money and effort.
Breaking this down, let’s take a look at an example of where you don’t use
subscription based payments.
Example: Your
electricity plan expired on a Sunday, you are
yet to activate the subscription package what this means is that you have to
wait a full day before you get electricity. Once it’s Monday, you set out to
your nearest disco office, stand in a queue, waste time and then you finally
make payment.
All these could have been
avoided with a subscription because once your electricity plan expires on a
Sunday, your account is automatically charged, renewing your plan and giving
you access to electricity and you didn’t have to break a sweat.
Trust & Total Faith in your Merchant
Trust is a big issue when it comes to subscription payments
because you have to trust the merchant you are making an agreement with.
When you find a reliable merchant – perhaps through a
referral from a friend or by your very own personal research - you will begin to
have total faith in that particular merchant which relieves you of any stress
or worry because you believe you will get value for your money.
Challenges of Subscription Payments in Nigeria
There are a handful of
challenges when it comes to subscription payments, why people don’t want to use
them, their beliefs and reasons.
Hidden Charges
Some merchant offer promos and discounts that make customers
subscribe and make payment to their package but fail to include in the fine
print that you will be billed in full.
I will strongly advise reading some customer reviews about a
seller or merchant to make sure the services they offer are what you want and
they are no hidden charges involved.
Uncontrolled Spending
I have experienced this on multiple occasions and what feeling am I talking about?
The feeling of receiving a debit alert and you have no idea
who, how and why your money was taken from you.
My first experience was when I started using Amazon and I
was sold to their Amazon Prime idea which got
me 2-day free shipping, unlimited movies,
books etc, maybe I didn’t read all the
terms and conditions but after 25 days a total sum of N25,000 was removed from
my account.
I was dumbfounded for a few minutes racking my brain –Who
withdrew my money? So, I asked around and was told that’s how it worked, they
give you free for the month and charge you full the following month.
Long story short, I requested a refund and it was resolved.
What did I learn from this? Ever since that day, I always read
carefully when signing up for a free trial package with terms and conditions.
Businesses that use Subscription Payment in Nigeria
- Internet service providers
- Software providers
- Cable TV service providers
- Electricity discos
- Newspapers & Magazines
- Pharmaceuticals
- Laundry services etc.
Types of Subscription Systems
These types of subscription systems depend on the service
involved and how customers’ access to those services are managed.
- Basic Access Subscriptions
- Limited Use Subscriptions
- Unlimited Use Subscriptions
Basic Access Subscriptions
This is usually the cheapest or most affordable subscription
package, which gives customers or users basic access to services. Give customers “a tip of the iceberg” so they see how
useful the services is to them and they can opt in for a more robust package
with better features.
Limited Use Subscriptions
These are the limited Internet data plans, magazine
subscriptions, software providers and many other monthly or yearly subscriptions,
which give you a limited amount of data and
time to use a particular service.
Unlimited Use Subscriptions
These relate to Internet data plans but also relates to
cable TV subscriptions that give you unlimited access to channels or Internet
data has long as you have paid for that mount.
Finally, let’s end with a
simple question.
Does Subscription Payment Work for you?