Good news for subscription and recurring businesses! Visa and Mastercard launch initiatives to boost Account Updater coverage in the next year.
The subscription economy is growing fast, and influencing the way many of us interact with brands. Now, it is possible to subscribe to music, TV shows, disposable razors, and even socks! And the likes of Uber have shown just how easy card on file payments can be.
Subscription and recurring businesses focus on convenience, and building lasting relationships with customers. So of course a continuous, uninterrupted service is absolutely critical to business success. One big pain point is involuntary churn – when a customer’s service is paused or cancelled without them knowing. A major cause of this is the expiry or loss of the registered card. As a solution, Visa and Mastercard provide the Account Updater service.
What is Account Updater?
Account Updater is a service that enables businesses to automatically update their customers’ stored card details. It is known under different names depending on the scheme: Visa’s solution is called Visa Account Updater (VAU), and Mastercard refers to their service as the Automatic Billing Updater (ABU). It is currently available in the U.S., U.K., Ireland, Italy, and Greece.
Account Updater works by providing information to the acquirer about lost and stolen cards, non-activated cards, and closed card accounts. This ensures you always have the correct card on file, so your payments remain uninterrupted and your customers benefit from a constant service.
This can only be good news. But some businesses and acquirers remain hesitant, due to lack of Issuer participation, and perceived poor data quality. In response to these concerns, and to encourage further adoption, Visa and Mastercard have introduced new initiatives.
So what’s changing?
Visa and Mastercard have launched several programs to encourage Issuing Bank engagement with Account Updater. The result of these will be an increase in effectiveness of Account Updater, and more successful updates overall.
As of October 1st, Visa has made Issuer participation in Visa Account Updater mandatory in the U.S. Similarly, in the E.U. Visa has introduced fees for Issuers that do not provide up to date information for expired cards in the Account Updater system (unlike in the U.S., this is not an explicit mandate).
Mastercard has also made participation in Automatic Billing Updater mandatory in the U.S., as of October 2016, but participation will be optional until April 2017 for Mastercard-only Issuers.
In all, merchants can expect Issuing Bank engagement to increase steadily as these programs come into enforcement. Subscription and card-on-file merchants not yet utilizing Account Updater should consider integration.
Adyen’s Account Updater offering
Adyen Account Updater is a service that connects its customers to Visa’s VAU, and Mastercard’s ABU, without the need to formally enrol with the schemes, and demonstrate compliance – which is handled by Adyen.
Adyen makes the Account Updater service easy, and largely automated. We maintain a central database of card data and, depending on the response from the schemes on a given update request, we register the update, and notify our customers. Importantly, Adyen customers retain full control over when they want to start charging the updated card details.
We offer several comprehensive integration options including single and bulk update requests triggered by the merchant. We also offer a lightweight integration with automated update logic, based on lifecycle events, such as payment refusal and upcoming card expiry date.
Adyen Account Updater is available to all Adyen customers operating in covered regions.
If you are excited about the potential impact Account Updater could have on your business, get in touch with your Account Manager or contact sales below: