This move infuriates users, as it comes off as a kind of oxymoron; you need to give vital credit card or PayPal info in order to access something that is free for a limited time. There are good reasons for this, however, which make a lot of sense from the company’s standpoint.
It Prevents Service Abuse
Let’s imagine Netflix allowed you to activate a free trial with nothing more than a name and email address. You have your thirty days, Netflix tells you you have to pay up, and you reach into your pocket for your payment details. But wait – why pay at all? Why not make a second account and repeat the process all over again? Asking for credit card information helps prevent repeat accounts being made. There are other means to do this, such as asking for a phone number and sending a verification that way, but why ask for something you won’t use in the long run? Grabbing the payment information makes the most sense in this regard, especially if the user decides to continue the service.
It Decreases Server Load
Having a lot of people sign up for a free trial sounds like a good thing. For some services, especially ones that just want to spread the word as far as possible, it is a good thing. For others, such as more complex services still trying to sort out how to manage user load on their servers, it can be disastrous. The last thing the developers need is a wave of people who come in, try out the service, cause outages and slowdown, then turn coy when it’s time to pay up. They need people who will stick around and actually want to use the service. By adding a payment wall to the free trial, this scares away tire-kickers who would otherwise mooch valuable server resources with zero intention of paying once it’s done. This then only attracts people who are willing to give payment info to try it out.
It Increases Feedback from Unhappy Users
If you sign up for a free trial without needing payment info, you can simply leave it alone if you find it’s not for you. By setting up a payment subscription before your free trial, you need to go through an unsubscribe process to stop being charged. Part of that process usually includes a feedback form where users can write their grievances for the developers to read. This gives the company a better idea as to why people aren’t continuing their free trial.
What About Accidental Payments?
One of the more cynical beliefs surrounding companies asking for payment is companies trying to increase their profit by users forgetting their trial and accidentally paying for a service they don’t want. This definitely happens, and it’s easy to see why people believe this is the primary reason companies ask for payment information. On the contrary, this can lead to frustrated customers harassing the support channels for a refund, so it’s in some businesses’ interest to not let users forget about oncoming payments after a trial.
Does It Help Convert Free Users?
There’s also the idea that asking for payment info upfront helps convert trial users into paid ones. As for what actually happens, the statistics on this are a little weird. Incisive Edge did some homework and discovered the following:
Services that required a credit card to start a free trial saw 2% of the site’s total visitors sign up for one, compared to 10% of the visitors that didn’t need a credit card. Services that required a credit card saw 50% of their free trial users continue on as a paid user, compared to 15% of the users who didn’t need one. Services that required a credit card saw 60% of the users stay on for 90 days after the free trial, compared to 80% of the users that didn’t need one.
In short, having no credit card requirement allows for more trials, but asking for payment details leads to more of those trial users paying once the trial is over. Despite this, people are more likely to stick to their guns after ninety days if they weren’t asked for credit card information during the trial. Very strange!
To Pay or Not To Pay
It can be annoying to be asked for payment information to start a free trial, but there are legitimate reasons for companies to do this. Now you know some of the top reasons. If a free trial asks for payment information, does it put you off? Tell us below.
