Dive Brief:
- As consumers spend more on goods and services through subscriptions, retail and entertainment categories are attracting a lot of their payments. Those two categories comprised roughly 43% of consumers’ overall subscription spending in the past 12 months ending in July, a greater share than 41% in 2025 and 2024, according to a new Bank of America report. Food, fitness and fashion was the next highest category (26%) among the non-utility spending.
- The growth in subscription spending by U.S. consumers at 7.7% outpaced the expansion of total card spending for the second consecutive year, also for the 12-month period through July, according to the report issued Wednesday, which is based on the bank’s transaction data.
- While subscription spending among Gen Xers and Baby Boomers grew modestly during that 12-month period at 3% and 5%, respectively, Gen Z subscription spending surged by about 14%, surpassing that of younger Millennials (about 10%) and older Millennials (nearly 8%), per the report.
Dive Insight:
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.
Facts Only
* Retail and entertainment comprised approximately 43% of consumer subscription spending in the 12 months ending in July.
* Food, fitness, and fashion were the next highest category among non-utility spending at 26%.
* U.S. consumer subscription spending grew by 7.7% over the 12-month period through July.
* Subscription spending growth outpaced total card spending for the second consecutive year through July.
* Gen Z subscription spending surged by about 14%.
* Younger Millennials spent approximately 10% of subscriptions, and older Millennials spent nearly 8%.
* Subscription spending on reading and information was the smallest category at 7%.
* Visa teamed up with Pinwheel to create a subscription manager tool.
* Subscription churn due to faulty payment methods costs companies up to $440 billion annually.
Executive Summary
Retail and entertainment categories accounted for roughly 43% of consumer subscription spending in the twelve months ending in July, which is a greater share than observed in 2025 and 2024. Food, fitness, and fashion represented the next highest spending category among non-utility spending at 26%. U.S. consumer subscription spending grew by 7.7% over the twelve-month period through July, outpacing the expansion of total card spending for the second consecutive year. Subscription growth varied significantly by demographic: Gen Z spending increased by approximately 14%, surpassing younger Millennials (about 10%) and older Millennials (nearly 8%), while Gen Xers and Baby Boomers saw modest growth of 3% and 5%, respectively.
Subscription spending on reading and information was the smallest category at 7%, yet this segment demonstrated the highest year-over-year growth, particularly within the Gen Z group. In response to rising subscription costs, payment providers are developing management tools; for instance, Visa partnered with Pinwheel to create a subscription manager tool aggregating information and offering cancellation assistance. Furthermore, the cost of subscription churn due to faulty payment methods is estimated at $440 billion annually, prompting other firms to use machine learning to identify payment failures and resolutions across media, fitness, and health businesses.
Full Take
The data reveals a significant divergence in growth patterns across consumer segments, suggesting that the shift in spending is highly stratified rather than uniform. The explosive growth observed in Gen Z subscriptions—14%—contrasts sharply with the slower growth among older demographics, which implies that the drivers of subscription adoption and engagement are generational, not simply economic shifts. This segmentation suggests that platforms catering to specific lifestyle or content niches (like reading/information) might be the most elastic areas for immediate user response, as evidenced by their high growth despite being a small segment of total spending.
The simultaneous emergence of technological solutions, such as the Visa-Pinwheel aggregator, alongside massive churn costs ($440 billion) highlights a tension between consumer desire for convenience and systemic friction in payment infrastructure. The focus on mitigating churn through machine learning indicates that the financial risk associated with subscription management is substantial enough to warrant advanced intervention beyond simple transactional tracking. The implication is that managing this financial landscape requires addressing both the surface-level transaction flows and the underlying mechanisms of customer retention across disparate groups, which may be disproportionately impacted by the velocity of Gen Z engagement.
What role does the high growth in the information category play in this framework? If the smallest segment grows fastest, it suggests a potential misalignment where low-volume, high-velocity spending is being overlooked in favor of large-volume categories like retail and entertainment, which may mask underlying structural instabilities in smaller but rapidly evolving subscription streams. How will payment providers balance revenue from ancillary services against solving macro-level churn issues? What happens if the AI solutions focus purely on payment failure rather than customer experience gaps?
Sentinel — Human
This text reads like standard financial journalism, competently weaving specific data points from a report into a broader context about consumer spending and payment management solutions.