Subscriptions Online - Credit card issues

The Payments Minefield: Developing a Strategy for Success in a Softening Economy
Paul Larsen, Payments & Operations Consultant

If you think it has been challenging for subscription merchants to meet recent credit card challenges, you may be in for a rude awakening. In the best of times, preventing inadvertent damage to customer relationships, caused by credit card ‘issues’, is problematic. In a softening economy, replete with delinquencies and shrinking available credit, the potential for future fallout is even greater. This must-attend session offers incisive best practices that can help you meet and overcome the challenges posed by an uncertain economic and competitive conditions.

My Notes

• 50% of American CC's within 5% of their credit limits
• The average number of accounts per individual that are overdue by one payment or more - 1
• A lot of businesses do not implement best practice in transactional processing

Transactional best practices:
When re-trying to clear a cc payment you should re-attempt each 10 days and 3 times so that you cover the full 28 day payment cycle.
If you make multiple attempts over a number of days your processor may tighten up your account as they perceive that you are trying to get "dodgy" transactions through.

He gave a couple of examples of transaction recovery (having initially been declined). An observation that transactions under $25 are more likely to get cleared - the figures for three different merchants (with different price points) were:

1. $13 - 51% recovered
2. $24 - 58% recovered
3. $50 - 27% recovered

The second and third ones tried 4 times over 30 to 40 days and they were able to do this because they are digital businesses and the direct cost of servicing a failed transaction is low to zero.

Cleansing of CC data
he then gave an example of merchants who asked for their CC details to be updated by Visa and Mastercard and these produced 2.2% to 5.1% of their details held which were out of date. This scheme in the US is a one time fee and less than a quarter for each update. This is compared to the cost of having payments declined.

[this is particularly relevant to annual renewals of recurring subscriptions]

Gift Cards
These are becoming an issue for merchants [I guess these are similiar to the 3V disposable credit cards in Ireland] and the CC companies are developing a mechanism to give merchants information that will allow them to identify a gift card when a transaction is declined.

keith

Comments

[abel miguel pemba-cuama]

i want register in 3v 2 have the card