Subscription spending climbs

Consumers are splurging more via subscription payments, often for fashion and entertainment, a new Bank of America report says.

While subscription spending on reading and information was the smallest category of spending (7%), per the bank’s report, those payments grew the most year-over-year, especially among the Gen Z group.

As subscriptions spending by consumers rises, some payments providers are offering tools to help manage them. Card network Visa teamed up with Pinwheel, a New York-based bill management company, to create a subscription manager tool earlier this year, which aggregates users’ subscription information, shows additional payment options and assists users in canceling their subscriptions. The tool aims to give customers control over unwanted charges on their cards.

In its fiscal third-quarter earnings report released in July, Visa CEO Ryan McInerney touted the company’s ancillary services, including its subscription manager tool, as a boon to revenue growth.

Meanwhile, other firms have focused on curtailing unnecessary subscription cancellations. Subscription churn, defined as customers losing access to their subscriptions due to faulty payment methods, costs companies up to $440 billion annually, according to an estimate from Butter Payments, a San Francisco-based payment recovery company. That startup, which primarily works with media, fitness and health businesses, uses machine learning algorithms to identify the cause of payment failures and possible resolutions.