As much as the term recurring payments may seem new to many companies and consumers, at least 75% of Brazilians already use this service to watch their series, movies, sports, music and children’s programs on streaming applications, as revealed by the survey carried out in 2022 by the FSB Research institute.
That’s right, the technology behind charging fees for various apps is recurring payment, and in addition to being used in app subscriptions and streaming, this payment method is present in the acquisition of services in sectors such as aesthetics and waxing, school fees and language courses, payment for gyms and sports activities, experiences, events, travel packages and several other segments that removed the demand for high credit card limits in order to win more customers.
And this can be a great strategy to improve sales in several sectors whose acquisition is postponed due to the fact that the consumer’s purchasing power has diminished.
The meaning of saying that the consumer’s purchasing power has decreased means that the same amount of money can buy fewer things now than it used to, even with the drop in inflation in Brazil.
This can occur due to several other factors, such as unemployment, which collaborates with relatively low wages for admissions, generating the need for families to choose more carefully what they will buy.
And precisely for this reason, recurring payments tend to have a positive impact on the sectors most affected by the drop in purchasing power, sectors that are related to non-essential goods and services.
This is because the recurring payment is a purchase with a credit card that does not consume the total limit of the consumer’s card, a payment model that, according to information from Valor Investe, grew by more than 60% in 2020 and moved regarding R$ 1 billion across Brazil.
In 2022, according to a survey carried out by Serasa, Brazilians registered an unprecedented average of 100 million payments with credit cards per day.
As disclosed by the Brazilian Association of Credit Card and Services Companies (Abecs), only in the 1st quarter of 2022, payments with credit cards grew 42.4% compared to the same period of 2021.
However, this same survey indicated an increase of 5.8% in bad debts with the use of credit cards, showing how important it is to pay attention to the tips of specialists such as Pagolivre “Collection automation and the department focused on recovering bad debts are important requirements when choosing a recurring payment company”.
A report presented by the global market research company Euromonitor International lists as a consumer trend a scenario where consumers are more cautious, responsible, but emotional. Thus, even if 75% of consumers in 2022 did not plan to increase their overall spending, offering recurring payments is a growing payment method that allows consumers to buy more and more as they are not restricted to credit card limits, positively impacting its purchasing power and sales in various sectors.
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