Keep Customer Card Information Current with Real-Time, or Continuous Updates, or Both
Updated card-on-file information can make the difference between a successful transaction and a repeat buyer versus a failed one and a poor user experience. Accessing card updates in real time provides a clear benefit to merchants and service providers alike. At VGS, accessing card updates includes the power to customize how and when to apply them, whether at a particular point in real-time, continuously, or a combination of the two. This is critical for optimizing payment outcomes, improving customer satisfaction, and driving revenue growth.
The “VGS” Factor
VGS is one of the only tokenization platforms in the world to build a direct integration to the card networks, which keeps it competitive on pricing, latency and data accuracy. By utilizing direct network API-based integration to get the latest updates in real time, VGS surpasses the industry standard of outdated batch file-based methods.
In contrast, Token Service Providers (TSPs) without direct card network integration rely on more lengthy, manual means of requesting and obtaining updated card information. The requests for batch-file card updates can take up to five business days while risking multiple points of failure between the merchant, TSP, and card network. Depending on card network update intervals and the processing times of all parties involved, a merchant or biller may not receive updated card-on-file information for up to a week after a card has expired or been reissued. The delayed delivery of account updates lowers the utility of the updated data for merchants and service providers, ultimately negatively impacting the buyer experience for their customers.
Customizable Card Account Updater
Card account updates are even more valuable when merchants can customize when, where, and how often they apply them for the most efficient, cost-effective approach. With VGS Account Updater, merchants can configure account updates as real-time, continuous, or a combination of the two.
In addition, merchants can also select whether they apply updates to all saved cards-on-file or a select portion. If you have millions of cards-on-file and know that a significant portion, say 50%, belongs to churned customers, you can achieve substantial savings by not updating those. Of course, you also realize cost savings by purchasing Account Updater just once - instead of multiple times from different networks and PSPs - since the VGS solution works across all.
Besides the merchant experience, Account Updater has a significant impact on user experiences. Automatically updating saved cards-on-file helps merchants to reduce manual card entry form fields and mitigate.customer checkout friction. The Baymard Institute's E-Commerce Checkout Usability Project, which reviewed cart abandonment data collected over the past 10 years for e-commerce sales across the EU and US, found checkout friction largely responsible for a cumulative $260 billion worth of lost sales.
Real-time Account Updates
Merchants can choose where and when to use real-time account updates that can be applied on-demand by the customer, which are ideal for use cases like:
1
Immediate Transaction Needs
When a payment attempt fails due to outdated card information, real-time account updater services can instantly retrieve the latest card details. This is particularly useful for high-value transactions where updated information in real-time can make a significant impact on revenue.
2
Low Transaction Volume or Frequency
Merchants with lower transaction volumes or those not requiring immediate card updates can benefit from the periodic updates provided by an on-demand service designed to update information in real-time when needed.
3
Initial Subscription Enrollment
For new subscription sign-ups that charge the user's card at enrollment, ensuring that follow-up recurring payments - go through smoothly is critical to the customer's future relationship with the service. These updates can be applied just in time, right before the card is charged for the next installment the following week, month, quarter or year
4
Near-Term Subscription Renewals
If a subscription renewal is coming up in a few weeks, merchants can update their card information on file on-demand. This enables them to receive real-time account updates at the point of charging the card. This is more cost-effective than paying to keep cards on file constantly updated even when a charge isn't imminent.
5
Free Product Use Before Charging
Real-time account updates also make it easier to align cost with revenue. Take an example of a freemium product where an user gets a certain time of free product use before being required to pay. The user might need to save their card when enrolling for a new product or service, but the card won't be charged at that point.
Let's say the user gets 15 days free. Merchants and service providers can utilize the real-time capabilities of VGS Account Updater to request an update before charging the card on day 16. This enables providers to align their cost for updated account information just in time with a revenue generating event, not 15 days in advance.
Continuous Account Updates
In 2022, 40% of card holders replaced their cards. Given that a typical card expires every four years, it's safe to assume that 25% of cardholders update a card each year, with the remaining 15% from account closures, upgrades and fraud impacts. That's a lot of cards and therefore, a lot of outdated card-on-file information that can impact a merchant's completed transactions.
Requiring customers to manually re-enter card information risks friction, poor user experience, and loss in sales. Automatic account updates, whether real-time and continuous, resolve this problem by eliminating customer intervention.
Continuous updates are best leveraged for merchants with:
1
High-Frequency Usage & Recurring Transactions
For businesses supporting frequent, recurring transactions (e.g., demand-based services like ride-sharing and grocery delivery or in-app purchases for gaming), continuous updates help ensure saved payment methods are kept current for time-sensitive needs.
2
Frequent Recurrence
For businesses that rely on more frequent recurring billing, such as weekly or monthly subscriptions on e-commerce or app stores, continuous account updates ensure uninterrupted service and friction-free payments, which can improve customer retention potential.
3
Lower Decisioning Needs
If a merchant wants to minimize frequent decisioning, continuous updates are a better option. Merchants only need to enroll or subscribe into continuous updates at the outset, with nothing further to be done. In other words, it's a “set it and forget it” option. This is useful for merchants who may have smaller internal teams to help manage payment infrastructure, a majority of active users, or more card charges occuring closely together.
Who Should Leverage Both Real-time and Continuous Updates?
1
Hybrid Business Models
Businesses that mix high-frequency and subscription-based transactions can leverage both services to cover all bases. For instance, a platform offering both one-time purchases and subscription services can use continuous updates for ongoing transactions, and real-time updates that can be applied on demand for low-frequency recurring billing.
2
Strategic Cost Management
To keep costs low, use real-time lifecycle updates at preset frequency rates and strategically deploy continuous updates for transactions based on dollar amount or urgency. This approach balances the need for immediate updates with cost-effectiveness.
3
Enhanced Customer Segmentation
Identify and segment customers based on their transaction behaviors. Cards held by high-value or frequent customers can be kept current with continuous updates, while others can be managed with real-time updates that are deployed in the moment based on analyzing purchasing behaviors.
4
Adding Fail-Safes
Even a card enrolled for continuous updates could fail or receive a false decline once in a while due to a processing error, system outage, timing of an update, multiple transactions in quick succession, or other unexpected factors. This could result in a need for a back-up real-time update. In the event a card fails a transaction, and goes into a customer's retry flow, a real-time update can be applied to try and convert the previously failed transaction. This is more complex so let's talk if you think this is something you'd want to explore.
Summary
Merchants can significantly improve their payment performance by strategically implementing a universal account updater solution that works across card networks and payment processors. At the same time, they can manage their costs with a solution that supports both real-time and continuous card updates, and enables them to select the cards they want to update. By understanding where each method should be used and how to combine both methods effectively, businesses can increase authorization rates, improve customer satisfaction, consolidate vendors, and reduce costs associated with keeping card account information current.
Customize Your Card Updater Solution
Embracing a tailored approach to card account updates by choosing real-time, continuous, or both enables merchants to keep card-on-file information current for accepting customer payments. Best-in-class payment experiences result in more completed transactions and a brand reputation for innovation, while matching the frequency of account updates to business needs creates cost efficiencies.
Merchant registers for VGS Account Updater
Merchant requests VGS for a card number (PAN) update.
VGS sends requests directly to the card networks for both types of account updates: Real-time and Continuous.
VGS receives card updates automatically from the networks and sends it back to the merchant. This includes:
- Sync (first-time immediate response) and
- Async (future updates after the card has been previously registered)
Merchant updates their Card-on-File (COF) information for a successful transaction.
Learn more about VGS Account Updater solutions for merchants. If you are a merchant payment enabler wanting to offer account updater solutions to your merchants, we also have you covered. Learn more here.
Reach out if you're looking to implement card account updates for the first time or if you are exploring a more configurable and cost-efficient solution.
