Visa Moves to Fix What Consumers Hate About Subscriptions

Recurring payments have become a defining feature of how consumers pay for entertainment, software, mobility, personal services and daily conveniences.

These subscription models now account for a large share of digital commerce, and they rely on credentials that must remain current, portable and visible to every party involved.

Yet the rise of subscriptions has also surfaced persistent frictions. Consumers often do not know where their credentials are stored, when charges are scheduled, or whether a price has changed. Visa is working to eliminate this and other frictions by rethinking how credentials operate in an intelligent, data-driven environment.

Rise of Recurring Payments and Information Gaps

The subscription economy’s growth has widened an imbalance in information across consumers, merchants and issuers. Consumers need transparency. Merchants, meanwhile, see cancellations come in but lack context about why they occur or whether a consumer might stay if they received a timely prompt or a tailored offer.

Jeffrey Chen, vice president of Digital Issuer Solutions Portfolio at Visa, described the mismatch in an interview with PYMNTS as part of the “Beyond the Card” series.

“Oftentimes, there is a lot of asymmetric information,” he said. “Sometimes consumers do not know where their subscriptions are, they do not know when payments are coming up, they do not know how much they owe. But merchants have quite a bit of knowledge gaps as well. They do not know the consumer’s intent.”

This asymmetry creates a costly cycle of missed payments, churn and reengagement that affects every part of the ecosystem.

How Pain Points Accumulate for Subscribers and Merchants

The frictions that flow through recurring models remain familiar. When a card is lost or replaced, the subscriptions tied to the old PAN fail, requiring consumers to reset each merchant credential individually. Chen said that “one of the biggest pain points that consumers used to have is needing to go to all of the different merchants that they were originally storing their card number with and remapping all of those over again.”

Merchants struggle, too. They want to keep subscribers active but lack a way to engage them at the moment a payment fails or a cancellation is submitted.

“You have to make sure that you are helping them acquire new customers, and you have to make sure that you are helping them retain those customers as well,” Chen said.

Consumers increasingly want the ability to consolidate everything into a single place, which creates another operational hurdle. Issuers also want to support centralization because it deepens loyalty and spend. Chen framed it as a win for all sides, provided the ecosystem can make switching simple and seamless.

Intelligent Spending as a New Consumer Experience

Visa sees an opportunity to turn subscription complexity into a better user experience powered by artificial intelligence-based decisioning and near real-time data, Chen said. Consumers increasingly want to know when a price rises, whether they use a service enough to justify the cost or whether they should switch plans.

“More and more consumers are going to be looking for AI-based capabilities to manage their spending, and subscriptions is a pretty good place to start,” he said.

A credential anchored to a modern infrastructure layer can support those insights by connecting what the consumer sees with what the merchant and issuer understand about the relationship. Visa views intelligent spending as a way to let subscribers ask natural language questions, receive contextual recommendations and, in turn, give merchants and issuers new signals they can use to refine offers or plan designs.

Visa’s Holistic Subscription Management Hub

Chen’s team has built a subscription management hub designed to bring clarity to both sides of the recurring relationship.

“Our goal is to help consumers know exactly what subscriptions they have, know when payments are coming up, know if pricing has changed,” Chen said. “Ultimately, what we are looking to do is to make it easier for the consumer to manage those subscriptions.”

The hub becomes even more powerful when paired with credential portability. When a consumer receives a new card, credentials stored with merchants can transfer automatically. Once a credential is associated with a PAN, Visa can “associate all of the places where that credential was stored in a secure way and transfer them over,” making updates “automatic” and “seamless” and enabling new digital interfaces to sit on top of that foundation, he said.

The Assets Visa Is Using

Infrastructure modernization is important, Chen said, adding that a credential must be near real-time, secure and portable. Intelligence “does not happen at the credential level. It happens at the experiences you build around it.”

Investments, including those which have been seen through Pismo, strengthen Visa’s ability to support near real-time data flows, personalization and issuer front-end capabilities that unlock intelligent financial management tools.

Reducing Churn and Creating Positive Ripple Effects

Eliminating friction around billing updates and subscription management can reduce churn and extend customer lifetime value. Better signals for merchants, more control for consumers and improved visibility for issuers reinforce each other in ways that stabilize relationships and deepen engagement.

Chen said he sees this as part of a broader shift toward intelligence embedded throughout the payments ecosystem.

“That is the type of transformational disruption that we can start to see with AI … because it is the future of what digital experiences should be, and we have to make sure that we are supporting all of the different constituents in our network to get there,” he told PYMNTS.