3 bold payments predictions for 2026

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 (like emails, calls, and SMS) declined by 13%, falling 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.

Want to learn more about AI-powered payment recovery solutions? Check out our evaluation guide and comparison scorecard. The guide details the 10 most important components of a recovery platform. When you’re finished reading, use our interactive scorecard to quickly compare solutions you’re considering.

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 percentage points, while debit card usage decreased by 6 percentage points. Furthermore, prepaid card usage saw an even sharper drop of 13 percentage points.

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: Amidst economic uncertainty, credit cards offer consumers a way to 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. 

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.

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.

This article originally appeared in Payments Next.