Business Models
Card Updater
Definition
Card Updater services that automatically update stored card credentials when cards are reissued or replaced. Visa Account Updater (VAU) and Mastercard Automatic Billing Updater (ABU) provide new card details to merchants. Essential for subscription businesses to reduce involuntary churn from expired cards. Updates happen during batch processes - not real-time.
Related Terms
Card-on-File
Storing customer payment credentials for future transactions without requiring re-entry. Essential for recurring billing, one-click checkout, and repeat purchases. Must use tokenization for PCI compliance. Card networks have specific rules including obtaining consent and identifying stored credential transactions. Network tokens improve approval rates for card-on-file.
Subscription Billing
A payment model where customers are charged on a recurring schedule (monthly, annually, etc.) for ongoing access to products or services. Requires card-on-file capability and careful attention to authorization rates, dunning, and involuntary churn. Card networks have specific rules for subscription billing including clear disclosure and easy cancellation. Higher risk classification due to chargeback patterns.
Network Token
A token provisioned by the card network (Visa, Mastercard) rather than the PSP. Network tokens are updated automatically when cards are reissued, improving approval rates for stored cards. Also called scheme tokens. Offer better security and authorization rates than PSP tokens. Essential for subscription businesses to reduce involuntary churn.
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