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

Abstract

PurposeWith 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/approachThree 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.FindingsThe 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/valueThis 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.