As digital payments make recurring charges easier and less noticeable, experts warn that consumers may underestimate their annual subscription spending. A new focus on decision-making and account review is urged to avoid hidden costs accumulating over time.
Subscriptions have become one of the quietest forces in consumer finance. What looks like a modest monthly charge can, over a year, become a material burden, especially when several services renew automatically and are rarely reviewed. Evaldas Stankevičius, an economist at Kaunas University of Technology, argues that the real issue is not the price tag itself but the way subscription systems are designed to keep money flowing with minimal friction.
He says digital payments have lowered the psychological barrier to spending. A consumer is more likely to accept a monthly charge of €9.99 than a single payment of €120, even when the annual total is identical. The same effect applies to services priced at €14.99 a month, which can appear far less significant than a clearly stated yearly commitment of €179.88. In his view, this changes the decision-making process: the choice is made once, but the payment repeats until the customer actively intervenes.
The European Central Bank’s SPACE survey shows how deeply digital payment habits have taken hold across the eurozone. According to the ECB, the share of everyday online payments rose from 17 per cent in 2022 to 21 per cent in 2024 by transaction count, while their value increased from 28 per cent to 36 per cent. Those figures do not measure subscriptions directly, but they help explain why recurring charges can pass almost unnoticed once they are tied to cards, apps and automatic renewals.
Stankevičius also argues that subscription businesses are not built on free content or services, but on scale and retention. Reuters reported that Netflix’s cost of revenue in 2025 amounted to 55 per cent of revenue, with content amortisation reaching $16.422bn, underscoring that streaming remains an expensive business despite its digital format. The company uses different pricing tiers to serve different customers, from cheaper ad-supported plans to premium packages with higher video quality, more simultaneous streams and extra accounts.
Spotify follows a similar logic, but with a stronger emphasis on customer stickiness. The free version lowers the entry barrier, then playlists, listening history and tailored recommendations make switching more inconvenient over time. ChatGPT, meanwhile, reflects a newer stage of the model, where the user is not simply paying for access to a finished product but for a system that is continually updated. Stankevičius says that if the subscription ends, the user loses some of the most advanced functions.
The same pattern appears in physical services such as gyms. A monthly membership may look small, but across a year it adds up quickly, and many people keep paying even after they stop attending, hoping they will resume training soon. That, Stankevičius says, means people are not only subscribing to exercise but also to the idea that they will change their habits later. He advises consumers to test any subscription with a simple three-part check: price, frequency of use and whether they would sign up again today at the same cost.
That final question is important because many recurring charges are easy to underestimate. A person may know the monthly fee, but still fail to calculate the annual total. A set of six services at €9.99 a month comes to €719.28 a year, which can compete with savings goals and fixed household costs. Research cited by Stankevičius suggests that consumers often understate their subscription spending and forget payments they no longer use, while many cancellation processes are deliberately complicated. He says the safest approach is to review bank statements, payment app subscriptions and recurring charges over the past 12 months, then sort them into services that are used regularly, those that deserve a cheaper plan or pause, and those that should be cancelled directly with the provider rather than only blocked through a bank app.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
