CNP Expo: Authorization Recycling Boosts Profit for Subscription Billers

May 23, 2013

How to get paid faster is a topic that gets the attention of all business operators. Subscription payment models are being used increasingly, but, for various reasons, authorization attempts are not always successful. But, making an extra attempt to authorize a card payment can result in extra profit, a panel of experts told a conference audience comprised mostly of merchants. Doing so automatically can save even more.

“There is money out there you could get,” said Jayme DeBraal, accounting manager for Alta Resources, at a Thursday morning session of 2013 CNP Expo.

A card rejection due to a bad expiration date can be approved with another authorization attempt. And, according to Paul Larsen, managing partner of Paul Larsen Consulting, “It’s in everyone’s best interest to keep that account intact.”

Interestingly, panelists noted, charities are one of the verticals increasing their reliance on subscription models. Gifts to churches are growing and parishioners like having their contributions made regularly, said moderator Tom Pouliot of Litle & Co.

“People want to support your charity,” Pouliot said.

One challenge merchants are having is the increasing tendency to put recurring charges on prepaid cards. Some merchants don’t take prepaid cards because they can’t be sure when the funds on the card will be depleted, but that decision will be costly, panelists said. Nearly 30 percent of people over 18 are unbanked. For most of these people, prepaid cards are necessary. Being able to safely accept these cards for payment will be important for businesses in the future, said DeBraal.

“You don’t want to shut these people off,” he said.