Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
After nearly four years of testing, Visa has launched a new service designed to help e-retailers avoid having to decline orders placed using outdated credit card accounts stored on their web sites.
After nearly four years of testing, Visa U.S.A. is rolling out a service designed to automate the updating of credit card information that shoppers store on retail web sites as well as in other merchants` back-end databases. The service is intended to avoid situations where online purchases are declined due to outdated account information. Visa notes that every year more than half of credit card accounts have information such as expiration dates that need to be changed
Storing credit card account data on a frequently used web site can make shopping easy, but not if a customer forgets to update information such as a changed expiration date--resulting in a declined purchase transaction and an unhappy customer who might never return. The merchant, meanwhile, is left with having to make an obtrusive call to inform the customer what happened.
"It`s in the merchant`s best interest not to have these kinds of interfaces with customers, because it creates a negative situation," says Laura DiGioacchino, Visa`s vice president of acceptance. Moreover, she adds, it can be difficult for a cardholder to remember all the web sites where she has stored credit card information, making it likely that sooner or later web merchants will decline her purchase transactions because of outdated data. Visa notes that, each year, about 55% of credit card accounts have some information that changes, such as new account numbers resulting from portfolio transfers between card issuers, expiration dates or upgrades to Gold or Platinum accounts.
Visa`s new Visa Account Updater is designed to modify a merchant`s customer databases with the most current credit card information on file with Visa card issuers and merchant acquirers. To participate, merchants contact the merchant acquirer they use for setting up and processing card transactions, then arrange for sending a daily batch file of copies of their customers` stored credit card account information over the Visa Direct Exchange, an Internet-based network that carries the account information to a dedicated server at Visa`s central processing facility, where the account information is updated and returned to merchants. The process does not interrupt ongoing credit card transactions, Visa says.
DiGioacchino says retailers can further automate the system by using XML and other integration technologies to have the returned account information automatically update their back-end databases of stored account information. She notes that smaller retailers are more likely to physically enter the returned updated information into spreadsheets.
40 merchants and 15 card issuers and merchant acquirers have tested Visa Account Updater in pilot programs since 1999, Visa says. Although the service is initially intended for offline as well as online companies that use stored account information to send recurring bill statements, Visa expects it to also be widely used by a general range of web, catalog and brick-and-mortar merchants, DiGioacchino says.
DiGioacchino declines to give a cost for using the update service, noting that the cost to merchants varies and is set by merchant acquirers. "Merchants who have tested the service say it`s more costly to update their account information with their old manual processes, plus it removes any ill will experienced with customers," she says.