Reducing involuntary churn: how tokenization and payment recovery are reshaping subscriptions

Paula Albu, Junior Editor at The Paypers, shares the key takeaways from a webinar with IXOPAY and Vindicia on why involuntary churn is a solvable, measurable problem, not an unavoidable cost of running a subscription business.

Subscriptions have become an important operating system of modern commerce. That can mean streaming and software, but also food, beauty boxes, and jewellery.

The recent data confirms it. Global subscription transaction value is forecast to hit USD 996 billion by 2028, up 68% from 2024, with subscription businesses growing roughly 11% faster than the S&P 500. But as merchants have discovered, signing a customer up is the easy part. Keeping the payments flowing month after month is where the real work begins.

In a recent webinar, Masha Cilliers, a payments industry expert, iNED, and board advisor, was joined by Kiel Cook, Principal Product Manager at IXOPAY, and Todd Doherty, Product Manager at Vindicia, to unpack why recurring payments fail – and what a mature recovery strategy actually looks like.

Here are a few of the highlights.

Build versus buy: what to keep, what to outsource

What should a business keep in-house, and what should it hand off? On build versus buy, the panel’s answer was pretty clear: anything that defines who a business is to its customers stays in-house – product, pricing and offers, customer experience and consent, retention policy and KPIs.

Where can the specialists bring real value? In billing and payment complexity, recovery models and scheme changes, and global scale and interoperability – the mechanics that change constantly and rarely differentiate a brand on their own. Todd Doherty highlights that the right split shifts as a company’s payments maturity grows, but the underlying principle doesn’t.

The leak nobody sees until it hurts

Doherty drew a hard line between voluntary churn – a customer actively deciding to leave – and involuntary churn, where a customer wanted to stay but a payment simply failed. Roughly 30-35% of monthly recurring payments fail for a payment-related reason, and 10-15% of those failures are never recovered. Those subscriptions cancel themselves, even though the customer never intended to leave – and the highest cost, Todd stressed, is lost lifetime value, since winning a customer back is far more expensive than keeping them.

Kiel framed the underlying shift as a paradigm change: in a customer-initiated purchase, the shopper carries the burden of getting authorisation through. Once billing becomes merchant-initiated, that burden transfers entirely to the merchant. As he put it, recurring revenue creates recurring responsibility.

The payment credential graph

Kiel introduced the mental model his team uses to manage this: every cardholder accumulates multiple credentials with one merchant over time – a card number eligible for account updater, a network token derived from it, plus wallet credentials, all pointing back to the same account. Network tokens, provisioned directly by card schemes, stay tokenized throughout the funnel and can refresh automatically as card details change,  which Kiel linked to a real authorisation uplift, though not a universal one. He advised merchants to benchmark against their own soft-decline volume: a portfolio dominated by hard declines (closed accounts, insufficient funds) won't see much benefit from network tokens at all.

Prevent, recover, measure: the model that works

Todd talked about a model that runs on three stages: prevent (keep credentials fresh via account updater, before renewal rather than after a decline), recover (use decline-aware models rather than fixed retry schedules), and measure (track recovery rate, time-to-recover, and extended lifetime value). Masha pushed back on the industry’s lazy default – a PSP that simply retries 24 hours later regardless of why the original attempt failed. If a payment failed at midnight over a suspected fraud flag, a blind retry the next day won’t fix anything. Sophistication, not repetition, is what actually recovers revenue.

The numbers back that up: across Vindicia’s public case studies, merchants applying this model resolve over 20% of failed renewal transactions on average – and results vary sharply by vertical. One dating platform recovered 33% of previously failed renewal transactions once it moved to decline-aware recovery.

Kiel added a risk layer too: subscriptions carry chargeback exposure; one-off purchases don’t. A payment forced through outside its normal cycle can put an entire dormant relationship back on a customer’s radar, and in some European markets, dispute windows stretch for years, making overly aggressive recovery a genuine liability.

PCI compliance becomes an asset, not just a cost

Kiel reframed that storing a card for a one-off purchase is a pure compliance burden with no guarantee of return. But once intent converts into subscriber consent, that same stored credential becomes a genuinely valuable asset – the compliance investment suddenly has something attached to it. Todd advises that PCI scope shouldn’t be a fear – working with the right partners dramatically shrinks both the scope and the number of questions an assessor will ask.

The takeaway

Involuntary churn isn't an unavoidable cost of running a subscription business; it's a solvable, measurable problem. Kiel's framing is worth remembering: the consent a customer gives is one of the most valuable assets a business can hold, and protecting it is the difference between a business that leaks and one that compounds.

This recap only scratches the surface – the mechanics of PCI tokens vs. network tokens, real merchant case studies, and audience Q&A all go deeper in the recording. Watch the full webinar here. 

About Paula Albu

Paula Albu has experience in content writing and editing, as well as being a creative storyteller. As a Junior Editor at The Paypers, she investigates Web3 technologies along with the latest trends and regulations in banking and fintech. Paula is committed to turning complex industry topics into engaging, accessible content that resonates with readers and creates a meaningful connection. She is available via LinkedIn or at paula@thepaypers.com.

 

About IXOPAY

IXOPAY is the enterprise-grade global payment infrastructure platform built for the era of agentic commerce, equipping merchants and businesses with AI-driven intelligence, orchestration, advanced tokenization, and the tools to power every step of their payments journey. Learn more at https://www.ixopay.com/.