Subscriptions versus one-off purchases: the impact of fee-charging models on consumer privacy concerns

Abstract

Purpose

With the popularity of paid apps and increasing concerns about privacy hazards, this paper aims to investigate the impact of mobile services’ fee-charging models on consumers’ privacy concerns, and generate insights for app developers’ fee-charging strategies.

Design/methodology/approach

Three experimental studies including 550 participants were conducted. All studies were between-subjects designs and based on the context of financial mobile services. The implementations of fee-charging models were manipulated by both visualized and test-based stimuli.

Findings

The results reveal that consumers are less concerned about potential privacy violations when using subscription-based (vs. purchase-based) financial mobile services (study 1). This effect is mediated by consumers’ perceptions that app developers that charge subscription fees (vs. one-off prices) are more likely to be consumer-serving motivated (study 2 and 3).

Originality/value

This paper advances the current understanding of consumer response toward paid apps, by proposing and testing a novel attribution-based mechanism to explain why the implementation of a subscription-based versus purchase-based fee-charging model can result in more favorable consumer reactions. Furthermore, this paper identifies the implementation of contrasting fee-charging models as a market-related factor that affects the extent to which consumers are concerned about potential privacy violations, extending extant literature on consumer privacy concern.

Citation

Yan, C., Yang, Z. and Dai, X. (2023), "Subscriptions versus one-off purchases: the impact of fee-charging models on consumer privacy concerns", International Journal of Bank Marketing, Vol. 41 No. 4, pp. 835-859. https://doi.org/10.1108/IJBM-06-2022-0271