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The Green Sheet Online Edition

June 27, 2022 • Issue 22:06:02

Why does my business need an automatic account updater?

By Nicholas Cucci

When it comes to running a business, security and efficiency are two essential factors. In today’s digital age, customers expect merchants to offer secure and convenient payment options that allow them to make their purchases with a few simple clicks.

Many business owners allow customers to store their payment details securely on file. This makes processing future sales and recurring bills easy for both parties, as the credit card details are already saved. In fact, according to a Mastercard report titled Credential on File: The Digital Commerce Growth Engine, 76 percent of consumers agree that using a saved card makes online or in-app payments much more efficient.

Expired customer payment info hurts business

While storing account information may seem ideal, it can pose risks. For example, if a customer’s credit card expires or is canceled, the business must manually reach out to them to update their payment information in order to process the transaction. Failure to reach them can result in losing a sale or, worse, the customer’s business entirely.

According to the Mastercard report cited above, 56 percent of consumers have replaced their default card in the last year due to card expirations, loss and fraud. Unfortunately, this creates headaches for business owners who rely on recurring payments to continue providing their products and services.

Risks of manually updating

Risks are associated with manually updating customer account information, as follows:

  • It’s time-consuming: Reaching out to individual customers to update payment information can take a lot of time, especially for merchants and other businesses with a large customer base and limited staff.
  • It’s costly: In addition to the time it takes to manually update account information, hiring additional staff to help with the process is costly. Should existing staff handle the updates, they won't be able to work on other essential business tasks. And if a customer's payment can't be processed due to outdated account information, a business may lose out on that revenue altogether.
  • It’s inconvenient for customers: If customers receive notice to update their card on file, they’ll likely need to take time out of their day to provide the updated information. Additionally, failure to promptly update the information can lead to interruptions in the services they expect to receive. This can be frustrating and inconvenient, which may cause them to take their business elsewhere.
  • It’s error-prone: Manually updating customer account information can lead to errors, such as accidentally inputting credit card information incorrectly. This can be costly for merchants and may lead to chargebacks or declined transactions-further aggravating customers and hurting revenue.

The solution: an account updater

A card account updater is a service that automatically updates customers' credit card information in the event of a change. This means customers won't have to be asked to update their account information manually, and merchants can be confident their payment details are always up to date.

An automated account updater works by periodically checking the credit card issuer’s database for changes to your customers' account information. If a change is detected, the account information will be updated automatically, preventing interruptions in recurring transactions.

This can prevent chargebacks, failed payments and service disruptions by ensuring customers' account information is always current. Future transactions can be processed without interruptions, saving merchants time and money while providing a more seamless experience for customers.

Top benefits of an account updater

Customers and merchants enjoy many benefits when using an automated credit card account updater:

  • It’s convenient for customers: Customers won’t have to remember to update their account information with you; everything is taken care of automatically. They likely are keeping track of several other accounts, so this can be a way to simplify their lives. In addition, if their credit card is lost or stolen, they can replace it and know their account with you will remain active
  • It’s efficient for merchants: Merchants will have more time to focus on other aspects of their businesses. They won’t spend time and valuable resources manually updating credit card account information. They’ll also reduce the risk of errors and declined transactions, saving money in the long run.
  • It’s secure for everyone: Account updaters use the latest encryption technology to keep customer information safe and secure. These solutions are PCI-compliant, which means they meet the highest data security standards.
  • It keeps things running smoothly: By using an account updater, merchants can avoid service disruptions and failed payments due to outdated credit card information. This provides a better customer experience and helps build loyalty and trust.
  • It can increase sales: Failed payments can cause 20 to 40 percent of a business's churn. Even if a customer loves a product or service, they may not bother to update account information if a payment fails. A seamless transaction process and fewer service disruptions can reduce inadvertent customer churn.
end of article

Nicholas Cucci is the co-founder and COO of Fluid Pay LLC. Cucci is also a graduate of Benedictine University and a member of the Advisory Board and Anti-Fraud Technology Committee for the Association of Certified Fraud Examiners, as a Certified Fraud Examiner himself.. Fluid Pay is the only 100 percent cloud-based Level 1 PCI Payment Gateway processing transactions anywhere in the world. Contact Nick at Nick@FluidPay.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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