Finances are being drained by unused subscriptions, prompting a shift toward transaction-based fees:
Recently, I checked my credit card bill and found that I had been paying a $19 a month subscription to DuoLingo for Spanish lessons. I flashed back to a moment 2 years ago where I thought I should really learn more fluent Spanish. I had completely forgotten I subscribed and realized I had just paid close to $500 for something I never used. It was at that point that I went on a subscription service witch hunt.
A few hours later I had identified close to $1000 in monthly, quarterly or annual subscription fees for things ranging from streaming services for a show I was watching to delivery services to credit card fees that I did not need. I ended the day disappointed in myself for wasting my money.
In moderation, subscription services can be fun, convenient and even help us cut down our monthly spending. Streaming services like Netflix and Hulu, even when used together, are much cheaper than a cable bill. Amazon Prime has been a lifesaver to all of us at one time or another. Subscription boxes like Ipsy or Coffee of the Month Club feel like a special, personalized gift every time they show up at the doorstep.
But what are the larger implications of the growing subscription economy? Its growth shows our reliance on technology to simplify our lives and the cultural demand for convenience and instant access. Of course, the major issue with these services is that they add up at the end of every month. Since many of these are automatically charged to the user’s card at different points throughout the month, it can be difficult to budget for and keep track of the multiple subscription charges.
Shocked by the thought of the long term negative impact subscription services offer, I started to wonder if a transaction fee approach can make more sense. At my employer, #DailyPay, we don’t charge subscription fees to access earned wages early. Instead, we only charge a transaction fee when someone takes out their earned wages. This keeps consumer spending at the lowest possible. Maybe this is the refreshing change the consumer (like me) is searching for. (Walden, 2020)
This perspective acknowledges the benefits subscriptions can provide, but it focuses on the hidden detriment recurring payments can create. It starts with the author realizing they had paid $500 for DuoLingo, something they never ended up using. I’m sure this company records activity and data from their customers, so wouldn’t they recognize this user is wasting money? Wouldn’t it be ethical to notify them?
The author might have had their notifications for the app turned off, but an email is also needed to make an account. It wasn’t until they checked their credit card bill that they realized what happened, and began questioning the larger implications of the subscription economy. With subscriptions, we begin to rely on technology more and more to simplify our lives; this now makes me question if those ethical notifications I mentioned earlier would only further extend that reliance.
After analyzing all their subscriptions, the author felt shocked by the long-term impact these services have, being that they all add up, and it’s hard to budget around multiple charges throughout the month. Is there an opportunity to format subscriptions in a way that you pay for them when it’s best, and not based on when you signed up? Could this potentially be run through the banks, where the banks will pay the subscriptions on the dates the services need, and the customer pays the banks through a personalized plan that best upholds their financial wellness? This may not affect the overall spending the customer dedicates to subscriptions, but it will create the awareness and reassurance that they know where and when their money is going.
References
Walden, J. (2020, February 10). Are Subscription Services Quietly Destroying Financial Wellness?. LinkedIn. https://www.linkedin.com/pulse/subscription-services-quietly-destroying-financial-wellness-/
