The pandemic
Mastercard aims to remove those pains with a new, streamlined approach it announced Thursday for consumers to cancel unwanted subscription services, whether paid via bank account or card, with a single click.
"When consumers struggle to cancel an online subscription, it's costly to both the financial institution and the end merchant, because frustrated consumers often initiate a chargeback dispute, but we want to remove all that friction from the ecosystem," said Chris Reid, executive vice president of identity solutions at Mastercard, in an interview.
Friction around canceling recurring payments and subscriptions isn't new; for several years many
In response to rising consumer complaints, the
Mastercard's white-label subscription-control service is available to any bank in North America or Europe with cards on the Mastercard or Visa networks, via a single API, enabling bank customers to see all their current subscriptions within their mobile banking app and click to unsubscribe without contacting the merchant.
Reid said Mastercard expects the subscription economy to grow as big as $1.5 trillion by 2025, and the card network plans to continue adding features to ease the management of these payments.
Working with Subaio, a Denmark-based software firm founded in 2016 that specializes in white-label financial products for companies including ABN AMRO, Mastercard got started on its new subscription-canceling service about a year ago, Reid said. Subaio has been a partner with Mastercard's small-fintech accelerator program, Mastercard Start Path Program, since 2020.
In the future, Mastercard plans to add the option for consumers to visit their mobile banking app to temporarily pause a subscription or upgrade it, if a merchant offers that option, Reid said.
The technology Mastercard uses for the subscription control service is closely related to the broad credential-management tools banks use to automatically update card details for recurring payments when a card is lost or stolen or expires, making it easy to build additional features as digital payments evolve, according to Reid.
Various banks use Mastercard's Credentials on File service that launched a few years ago, he said, declining to disclose participants.
Mastercard also has not disclosed any banks that may offer its one-click subscription control service, but Reid said the card network is in discussions with a handful of banks that show strong interest in adopting it.
There will be competition for Mastercard's newest service, as other banks already offer variations of the same capability.
JPMorgan Chase offers a tab in the Chase mobile app where consumers can track recurring payments for each of their cards and edit payments manually or simply turn off automatic payments.
Wells Fargo currently enables users to view all recurring payments under the card controls tab within its mobile app; customers are advised to contact the merchant to discontinue those payments.
Capital One customers can ask the company's virtual assistant Eno to display all subscriptions and recurring payments. Eno also identifies and informs customers of duplicate charges and subscription-fee hikes.
Several third-party firms offer tools to manage recurring subscriptions, sometimes with money-management tools or the requirement for users to share login details or pay a fee for automatic cancellations of unwanted subscriptions. Truebill, Hiatus, Trim, TrackMySubs and PocketGuard are a few fintechs providing online subscription-management tools.
Rocket Mortgage got into the subscription-management business in 2021 when it bought TrueBill for $1.3 billion in 2021. The Rocket Money app, built on TrueBill's technology, enables users to cancel enrolled subscriptions with four clicks. The service requires users to share account login credentials to cancel some subscriptions, and different subscription-based services sometimes require different actions. Rocket purchased TrueBill for $1.3 billion in 2021.
It makes sense for banks to operate as a hub for recurring payments, according to Reid.
"Our newest capabilities are in line with the direction digital payments are moving, to put consumers in control of their spending," Reid said.
