Subscription businesses see increase in declined payment cards

Declined transactions up as much as 45 percent

Boston, Sept. 30, 2015 (GLOBE NEWSWIRE) -- Subscription and recurring revenue businesses are experiencing an increase in the rate at which payment card charges are declined, according to a newly published report from Subscription Insider and Paul Larsen Consulting, LLC (PLC). The report, "Account Updater Trend Report," aggregates and compiles PLC payment card usage data from merchants who processed recurring subscription or membership payments without a payment card being physically present -- also known in the industry as "Card-Not-Present" (CNP) transactions.

The report analyzes transactions made by merchants that used Account Updater, a service provided by Visa, MasterCard, and Discover to help merchants avoid what the subscription industry calls "involuntary churn," or loss of customers due to declined payment cards. But not all merchants are aware of, or fully understand, the importance of the service.

"Our new trend report examines why cards were declined over a two-year period, helping recurring revenue merchants understand why cards have been declined and their impact on subscription revenue. The report also recommends important actions businesses should take now," said Subscription Insider CEO and publisher Kathy Greenler Sexton.

In April 2015, the volume of declined charges that involved payment cards that had new expiration dates and new card numbers had stabilized, after major data breaches at Target, Neiman Marcus, Home Depot and others in 2013 and 2014, according to the report. Starting in May of 2015, declined charges started increasing, due to the early impact of compliance with the new Eurocard, MasterCard, Visa (EMV) "chip card" security standard. As of June 2015, stale account updates were 45 percent higher and stale expiry date updates were 25 percent higher than in April 2015.

Sexton continued, "Although the new 'chip card' standard takes effect October first, only one in 10 U.S. banks has reissued their cards. We expect card reissuance to continue through 2017. Businesses that do not understand these trends will be ill-prepared for the tremendous increase in lost revenue due to declined cards."

Paul Larsen, CEO of PLC said, "The information we were able to compile is unique in that it cuts across billing solutions, plans and industries to understand, at a broad level, how payment cards are successfully being processed over a period of time. It demonstrates the impact of recent events and highlights the urgency of subscription businesses having the right technology, teams and business practices in place."

The "Account Updater Trend Report" covers Account Updater's history, explains how Account Updater works, examines trends in outdated payment cards, describes actions merchants that rely on recurring payments need to take and provides a detailed look at Account Updater response code trends. To access the full 16-page trend report, please visit:

Subscription Insider also released a companion guide, "How to Access the Account Updater Service," which can help businesses select a payment processing vendor that provides access to the Account Updater services. The companion guide also includes a directory of more than 25 billing and subscription management solutions. To access the 13-page companion guide, please visit:

About PLC

Paul Larsen Consulting, LLC (PLC) exists to maximize the lifetime value of subscriptions by helping crush credit card-caused churn. The company's mission is to serve the community of subscription merchants by optimizing their bottom-line credit card processing results through the application of the recurring industry's best practices, in the most effective ways. After 13 years as a merchant, the company has spent 13 more years delivering fine-tuned tools and weapons to more than 450 subscription merchants, including Ancestry, Angie's List, Audible, Consumer Reports, Disney and Dollar Shave Club. For more information, please visit or call (845) 489-2849.

About Subscription Insider

Subscription Insider, an online media business owned and operated by Authority Media Network, LLC, delivers intelligence on how to build, market and sell subscription-based products and services. Through exclusive news, research and tools (including case studies, trend reports, buyer guides, tutorials and best-practice information), Subscription Insider provides the industry's most authoritative how-to guidance on running subscription businesses more profitably. For more information, please visit or call 800-764-9133.


Contact Data