Visa Account UpdaterMaking Sure Recurring Payments Go Smoothly on the Visa Network

Visa Account Updater: Keeping Track of Cardholder Data so You Don’t Have to

Want more sales with no added fraud liability? Of course you do…who doesn’t?!

Reducing customer friction is a consistent, proven method for achieving higher sales. After all, the fewer barriers between customers and products, the more likely they will end up together. That’s why Visa Account Updater (VAU) could be every subscription merchant’s best friend.

In this article, we’ll look at how Visa Account Updater works and how it can help simplify subscriptions to capture more revenue.

What is Visa Account Updater?

Visa Account Updater

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Visa Account Updater, or VAU, is a service that exchanges updated account information between participating merchants and Visa card issuers. Merchants using stored information for recurring payments can use VAU to boost retention and prevent chargebacks.

Visa Account Updater is a service from Visa that streamlines the process of updating cardholder details for recurring payments.

Whenever a Visa cardholder receives a new card due to expiration, loss, or account changes, VAU automatically updates the stored card information with merchants. This eliminates the need for customers to manually provide updated card details, reducing the risk of missed payments and service interruptions.

VAU ensures that merchants always have the most current card information. In that way, the service enhances customer satisfaction, improves retention rates, and minimizes the likelihood of declined transactions and chargebacks.

Why is Visa Account Updater Necessary?

Visa Account Updater is mandated by Visa. But, why?

For subscriptions to work, the merchant needs to have their customers' payment card data to facilitate future orders. The card data stored to conduct recurring payments need to be correct. This can present a problem, as consumer card information changes regularly for many different reasons:

• The card may have been replaced due to loss or theft
• The original card has expired
• The cardholder’s bank account was closed or upgraded
• The customer’s name or address changed
• The issuer merged with another financial institution
• The issuer changed their card network membership

Storing and managing large tracts of information can be an extremely time-consuming and cost-prohibitive process for many merchants. Cardholder information mismatches can anger otherwise-satisfied customers, leading to more declined transactions and service cancellations. Holding outdated card details can also lead to more improper data re-entry, lost or stolen card numbers, and other trouble that can impact the merchant’s reputation and revenue.

Visa Account Updater ensures that merchants always have access to customers’ current bank information for purposes of recurring billing. Using it can save time and prevent hassle while promoting customer satisfaction, retention, and loyalty. Merchants get added security, increased revenue, and streamlined services, while cardholders experience less hassle and may have increased confidence during transactions.

How Does Visa Account Updater Work?

As mentioned above, Visa Account Updater ensures that merchants employing a subscription billing model always have access to the most accurate billing information possible. The process works by pre-verifying merchant data against Visa’s on-file information.

Here’s a basic rundown on the VAU process:

Real-Time Visa Account Updater

Visa also offers Real-Time Visa Account Updater. This is a separate tool that can be used alongside the standard VAU.

Real-Time Visa Account Updater removes the pre-authorization step (required by the current VAU). It effectively eliminates the time gap between merchants requesting account updates and submitting authorization requests.

Both systems feature unique capabilities, and Visa recommends they be used in tandem. These work as follows:

VAU Features	Real-Time VAU Features
Operates outside VisaNet	Operates outside VisaNet
Requires two-step authorization process	Enables one-step for both authorization/account updates
Supports batch files for large scale updates	Provides faster speed-to-update account file changes
Facilitates portfolio conversions from other payment networks	Provides faster speed-to-update account file changes

Can Cardholders Opt Out of Visa Account Updater?

Yes, bank customers have the option to opt-out of Visa Account Updater if they choose not to participate in the service.

To opt-out, cardholders generally need to contact their bank or card issuer directly. This can usually be done via the bank's customer service hotline or through secure messaging on the bank's online platform. Customers may need to provide their account information and request specifically that they do not want their account details automatically updated through the Visa Account Updater service.

Once the request is processed, the card information will no longer be automatically updated with merchants. This means cardholders will need to update their account details manually when necessary to continue using a service if their card information changes.

Visa Account Updater & Chargebacks

Visa Account Updater use can have a direct impact on chargeback volume. This is perhaps the best reason for merchants to use the service.

Visa Account Updater can also reduce the risk of seeing chargebacks filed with Visa reason code 12.4 (Incorrect Account Number). If the account information on file is updated automatically, that makes it less likely that the merchant will end up forcing through a transaction which leads to a chargeback.

VAU plays a major role in ensuring overall customer satisfaction. As we’ve mentioned before, unsatisfied customers are much more likely to file chargebacks. Without VAU, subscription services could be interrupted. This could be a nasty surprise for the cardholder, even if it was their responsibility to inform the merchant of any account changes.

The seller could then have to confront the cardholder, and the subsequent frustration and inconvenience may be enough to push them to action. The buyer might cancel their account and file one, or even multiple chargebacks. Avoiding the situation entirely by using Visa Account Updater is a much better strategy.

Other Benefits of Using VAU

As outlined above, chargeback reduction is a great reason to use Visa Account Updater. However, it’s just one of several perks offered by the service. Merchants will also see:

Challenges for Merchants Using Visa Account Updater

While Visa Account Updater offers several significant benefits, merchants should also be aware of some potential challenges. These include:

By understanding these challenges, merchants can better prepare and strategize for the successful implementation and use of Visa Account Updater.

VAU: One Node in Your Network for Better Payment Processing

Overall, Visa Account Updater is an incredibly useful asset for merchants that offer goods or services on a recurring billing model. There’s no reason why a merchant would want to refuse to use it. That said, VAU should be just one of numerous tools in one’s arsenal to ensure that payments go through as intended.

Automatic Billing Updater from Mastercard, for example, is an equivalent tool for the Mastercard network. Other tools to capture more sales and prevent disputes include address verification, geolocation, velocity limits, and fraud scoring, to name just a few.

At the end of the day, merchants should think about VAU as one more tool in an expansive arsenal for chargeback and fraud prevention. They must leverage each component to create a truly effective risk mitigation and chargeback prevention strategy.