Subscription Payment: A Technological Blessing or Trap?

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.

Subscription PaymentWhat 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?

how does Subscription Payment 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.


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.
recurring payments

Types of Subscription Systems

These types of subscription systems depend on the service involved and how customers’ access to those services are managed.
  1. Basic Access Subscriptions
  2. Limited Use Subscriptions
  3. 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?


TechAdvance is a payment application development company with a strategic focus in developing and deploying niche payment companies to serve the needs of large public and private sector organisations in Nigeria.

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