Visa Account Updater
Credit cards are like milk: they expire. When your customers are using stored payment credentials to pay recurring charges, a card expiration can cause a disruption to service that can lead to frustration, annoyance, and account cancellation—even though it’s not the merchant’s fault.
Visa is trying to prevent these unfortunate scenarios with Visa Account Updater, a service that automatically provides updated payment credentials to rebilling merchants when a customer’s stored card changes due to expiration or other reasons. How does Visa Account Updater work, and can this service really help merchants avoid account cancellations and payment disputes?
Lots of merchants are adopting subscription-based pricing models in which the customer’s payment card is stored and automatically charged on a recurring basis. Subscriptions provide a steady and predictable revenue stream, and customers appreciate conveniences like getting unlimited content for one fixed monthly price. While the subscription model certainly doesn’t fit every business, it makes lots of sense to offer it where appropriate.
One of the biggest points of friction in the subscription model is when automatic renewals can no longer be processed. Usually, this is due to the payment credentials changing. Expiration is the most common reason for this, but credentials also change when cards are reported lost or stolen, or when the cardholder changes their name or address. Customers don’t like service interruptions or declined transaction notices, and fairly or not, they sometimes blame the merchant for these issues.
Visa Account Updater promises to ride to the rescue when these situations occur, swapping out the old card data for the new without requiring any action on the part of the customer or the merchant. Here’s what merchants need to know about this service.
What Is Visa Account Updater?
Visa Account Updater is a service that provides automatic payment credential updates when Visa cards change due to expiration, account closure, or other reasons. Implementing Visa Account Updater is mandatory for banks that issue Visa cards, but merchants have to enroll in the service and cardholders can opt out of it if they wish.
There are actually two services with this name, the standard Visa Account Updater and Real Time Visa Account Updater.
They can both be used together to ensure fast and seamless updates to stored payment credentials. Real Time Visa Account Updater works within VisaNet and is generally faster, allowing updates to occur after a single authorization step.
The standard version operates outside of VisaNet and requires two-step authorization, but it can handle batch files for large-scale updates as well as portfolio conversions from other card brands. Both services can be used together, you don’t have to choose one or the other.
How Does Visa Account Updater Work?
Issuing banks send updates to Visa whenever a cardholder’s account information changes. Prior to charging a stored card, merchants query Visa through their acquirers to see if any details have changed. If that is the case, Visa securely transmits the new card data to the merchant, who must then update the customer’s account within five days.
With Real Time Visa Account Updater, merchants can send a pre-authorization inquiry through their acquirer which will return any available card updates from Visa. This effectively integrates the Visa Account Updater service with the standard authorization process, making it possible to obtain immediate, real-time updates.
What Are the Advantages of Using Visa Account Updater?
Visa Account Updater offers significant benefits for both merchants and their customers. Cardholders get to enjoy an account updating process that takes all of the hassle out of getting a new card. Instead of logging in to all of the sites that have their card stored and manually updating the information, Visa handles it all for them. Their service is uninterrupted, and they don’t have to deal with alarming “your transaction has been declined” messages from their bank.
For merchants, the benefits may be even more substantial. The biggest one is that more authorizations for recurring billing charges will get approved, preventing discontinuity of service and leading to higher levels of customer satisfaction and retention.
Despite the benefits, some cardholders may opt out of Visa Account Updater because they’re worried about data security or unauthorized charges. These fears are largely unfounded, and merchants who rely heavily on subscription sales may wish to engage in some advocacy on Visa Account Updater’s behalf to get their customers to warm up to it.
Can Visa Account Updater Help Merchants Avoid Chargebacks?
While subscription billing can be a frequent source of chargebacks, Visa Account Updater doesn’t directly ameliorate the issues that can cause these to occur. Recurring billing chargebacks usually happen when the customer forgets they subscribed or has difficulty canceling their subscription. If a transaction can’t be processed because the payment credentials are no longer valid, there’s no charge to dispute.
On occasion, however, merchants may be able to force improperly-authorized transactions against expired or invalid cards. When this happens, a chargeback is extremely likely to follow, and in many cases is initiated by the issuing bank that receives the transaction. Visa Account Updater can prevent these chargebacks by ensuring that you never end up storing outdated payment credentials long enough for this kind of error to occur.
Conclusion
Subscription services are a large and growing sector, especially in e-commerce, and merchants who derive a lot of their revenue from this billing model should be highly motivated to make the experience as easy, convenient, and painless for their customers as they can.
Visa Account Updater can reduce the strain on your customer service team, prevent your customers from being inconvenienced, and reduce the number of account cancellations that occur due to frustration or inertia.
While Visa Account Updater is not exactly a frontline defense against payment disputes, it can play a part in avoiding authorization mishaps that can result in automatic, uncontestable chargebacks. If you’re selling subscriptions and you haven’t yet implemented Visa Account Updater, it’s a good time to reach out to your acquirer to get the ball rolling.
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