By Charles Rosenblatt, CEO of Butter Payments
The payments ecosystem is evolving at an unprecedented pace, and for subscription-focused businesses, the stakes have never been higher. Rising acquisition costs, shifting consumer habits, and economic headwinds are forcing brands to reassess their strategies and focus on improving retention.
To help you succeed in 2026 and beyond, Butter’s team of experts analyzed transaction data from the first nine months of 2025. We identified three key trends that will transform the payments ecosystem and how subscription companies do business.
Trend 1: AI will become a must-have, not a nice-to-have
Over the last year, we observed a drop in recovery performance.
Between January and September, the recovery rate for manual account update strategies (such as emails, calls, and SMS) declined by 13%, from 66% to 53%. This drop is a response to people tightening their spam filters to avoid (and rightfully so) the ongoing rise in messages from businesses, political campaigns, and, yes, fraudsters.
Meanwhile, the recovery rate for algorithmic, AI-driven retry strategies decreased by only 2%, from 17% to 15%.
What does this mean for you? AI-powered algorithmic retries are more resilient and reliable than manual account update strategies, especially in rapidly shifting business environments. In 2026, which is already shaping up to be volatile, AI retries will be a fundamental requirement for survival and growth.
Trend 2: More consumers will use credit cards to purchase subscriptions
Consumers’ payment preferences evolved significantly in 2025. Our analysis showed that global credit card usage increased by 3%, while debit card usage decreased by 6%. Furthermore, prepaid card usage saw an even sharper drop of 13%.
What drove this uptick in credit card usage? Rewards, fraud protection, and tighter budgets.
- Rewards: Many cards offer cash back, points, or airline miles, providing an effective discount on purchases.
- Fraud protection: By law, credit card issuers must cover the costs of fraud after a consumer reports their card lost or stolen. This means card owners aren’t responsible for unauthorized charges—a huge plus in an era of increasing financial fraud.
- Tighter budgets: Amid economic uncertainty, credit cards help consumers stretch their purchasing power.
Ultimately, this shift in consumer preferences is a positive for subscription brands. Transactions made with a credit card are more likely to be successful than those made with debit or prepaid cards.
The most successful subscription brands in 2026 will lean into new consumer preferences by making it easier for their customers to use their credit cards and offering additional rewards like discounts and free swag for using the payment option.
| Did you know? The top-of-funnel conversion rate for monthly subscriptions is 37% higher than for non-monthly plans. |
Trend 3: Bundling will outpace pure subscriber growth
In 2025, the rate of customers holding multiple subscriptions with a single merchant more than doubled, jumping from 6% to 15%. This is a clear sign that “subscription fatigue” isn’t just about the total number of recurring orders a shopper has, but also the total number of merchants they purchase from.
We expect this trend to continue in 2026 and encourage subscription brands to lean into bundling. Not only does bundling increase average order value, but it also has a profound impact on retention. Our data shows that customers with multiple subscriptions tend to stay enrolled longer.
Here’s what our data reveals:
- Single subscription at sign-up: 40% retention rate.
- Multiple subscriptions at sign-up: 76% retention rate.
- Upgraded to multiple subscriptions post-signup: 52% retention rate.
How can you use this data to grow your business?
- Encourage customers to enroll in multiple subscriptions at sign-up by offering bundling discounts or promos.
- Enhance your checkout flow by recommending complementary subscriptions and highlighting the benefits of bundling your products together.
| Did you know? Customers who enroll in multiple subscriptions at sign-up have a 76% retention rate, significantly higher than those who enroll in a single subscription. |
Final thoughts
To succeed in 2026, you must implement strategies that drive both acquisition and retention. Otherwise, you risk falling behind your competitors.
Start by partnering with an AI-powered recovery solution to mitigate tighter payment restrictions. Follow this up by listening to your customers and making it easy for them to enroll with their preferred payment method. Finally, go all-in on bundling. Consumers prefer building a deep relationship with a few brands instead of shallow ones with many. You’ll be glad you did when your retention rate soars.
About the Author
Charles Rosenblatt currently serves as Chief Executive Officer at Butter Payments, spearheading strategies that leverage machine learning to improve payment authorization rates and reduce involuntary churn—key levers for boosting subscription revenue. Charles is a recognized leader in global payments with a track record of driving success. Before joining Butter, he held senior roles at Payoneer and Hyperwallet, where he helped lead the company to its IPO, and at Hyperwallet. Rosenblatt’s teams created more than 40% revenue growth for those companies in the year before their exit. During his time at PayQuicker, he served as president and helped them to earn a spot on American Banker’s Top 40 Best Fintechs to Work For. Charles created the first Buy Now, Pay Later product in the United States through Payroll Deduction in 2001 at Capital One. He holds a BA in Economics and Politics from Pomona College and an MBA from UVA’s Darden School of Business.