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Automatic Update of Credit Card Info for Recurring Billing Merchants

One of the biggest problems for merchants that charge credit cards on a recurring basis is maintaining accurate credit card information on file. In any given year, roughly 50-70% of Visa cardholders will change their account information. This places a heavy burden on merchants to reach out to customers and capture the updated information.

There are a number of reasons credit card details change including bank mergers that result in new numbers, identify theft, balance transfers and the regular updating of the card's expiration date. Regardless of the cause, merchants face an uphill and expensive battle to deal with these changes. Eight years ago Visa started working on a program they call Account Updater (VAU). They created an automated system that directly interfaces with merchant accounts and updates customers credit card information. Here is how it works:

1. Merchants are enrolled in VAU through their participating Visa Merchant Bank.

2. Visa card Issuers submit electronic files with updates to Visa when a cardholder's account information changes.

3. Issuers are required to send these file updates within two business days, and are strongly encouraged to send them daily to ensure that account-on-file Merchants have the advantage of the latest authorization data.

4. The Merchants credit card information is sent to Visa. VAU processes inquiries against its database and provides responses to the Visa Merchant Bank.

Participating Merchants are required to update their customer account database within five business days after receiving VAU updates from their Visa Merchant Bank and to ensure that the updated database is used in future Visa transactions in accordance with Visa Account Updater Terms of Use.

Visa charges a nominal fee for the service which varies according to volume but is in the range of $.30 to $.50 per 'matched' file.

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