There are a lot of reasons why a company would want to vault credit card information. For subscription services, storing the card information that is charged each billing cycle is paramount. If your customers return for one-time transactions based on specific needs, having their payment information stored and ready to use makes it easier for them to get in, out, and on their way. Same goes for mobile-forward businesses who want to build the seamless experiences their customers expect. In all these cases, Account Updater is a must.
Account Updater is a secure communication network via card brands (e.g., Visa and MasterCard). It allows issuing banks to distribute updated card information to merchants or payment service providers (PSPs) who vault card credentials. Card information needs to be updated for a variety of reasons. For example, a customer may move and update their billing address for their card, lose their card, or cancel their card altogether. Or, more broadly, issuers expire and replace a portion of their card portfolio each year. Without Account Updater, vaulted card information goes stale: the customer’s updated payment information doesn’t make it to your environment. If you require customers to update their information when changes occur it may lead to customers simply not going through the necessary effort, leading to unnecessary declines, greater friction during checkout, and—consequently—customer churn.
Loon by Pagos is an easy-to-use, single point of access to all of your Account Updater needs. It’s a simple API that allows you to get updated account information from all major card brands, either by API calls for individual cards, API-batch calls, or batch file uploads. It’s a flexible service that can integrate with any vault system, processor, acquirer, or payment service provider (PSP)—no laborious integration required. If you have a multiple processor set up, Loon can help create consistency and drive performance across all processors globally. If you only have one processor, Loon will help you gain control over your stored card credentials while improving performance. Let Loon help improve your customer experience and reduce your number of declines.
Let’s look at some examples of how Loon can help your business.
The Account Updater use case for subscription transactions is straightforward. Subscription services are becoming an increasingly popular way to attract and maintain customers. Everything from traditional news sources, streaming services, clothing rental services, meal kit delivery, and consumer and business software services is included in the subscription category. Let’s look at an example timeline of a customer purchasing a product on a 30-day monthly billing cycle.
|August||Customer signs up for subscription with card credentials, which are stored in the company’s vault|
|September||Customer’s subscription is billed without issue|
|October||Customer’s subscription is billed without issue|
|November||Customer’s subscription is billed without issue. Customer’s card then expires and she is issued a new card from her issuing bank. The company does not have an Account Updater method in place.|
|December||Customer’s subscription is declined. Company reaches out for updated credentials and the customer cancels subscription or never responds.|
In this example, the lack of Account Updater not only caused customer friction because her access to services was compromised, it also caused customer churn. The customer had only used the services for a few months, it was not yet indispensable to her. Rather than go through the customer service and data entry process to update her card information—something that every single merchant that vaulted her information must do—the customer preferred to cancel the subscription.
With Loon, the account information would have been updated in November when the issuing bank issued a new card. This entire scenario could have been avoided and the revenue of the subscription company would have remained intact.
Now let’s consider the value of Account Updater in one-time transactions with cards on file. Consider a customer with a very busy schedule. She has been loyal to a company for a few years and always just makes one-time transactions using the card she saved in her account when she needs more product.
This customer recently moved and has a new billing address. When she goes to make a new order, her order is declined with an AVS flag. This customer is multitasking when the transaction is declined and doesn’t have the time to review why the order wasn’t processed. She closes the window and says she’ll come back to it another day. The customer eventually sits down to update address details and makes the transaction two weeks later.
In this scenario, we do not have customer churn, but the lack of Account Updater did create enough checkout friction to cause delayed revenue realization by two weeks. If this happens to even a minority of customers each month, there can be pretty serious impacts to incoming orders and revenue realization. With Loon, this could be completely avoided. Loon would update the company vault with the new billing address and the customer could make the order on the first try.
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