April 3, 2018
At the New York International Auto Show this week, the buzz around buying cars via subscription has put a spotlight on just how far the subscription model has come and that merchants of all kinds should be considering it—and the technology required to efficiently implement recurring payments.
Car makers have learned from the mobile device industry (and others new to the business model) that consumers can be more willing to spend on increasingly expensive products if they have the flexibility to pay monthly and, perhaps, easily upgrade to a newer model when they want. The New York event illustrated that the number of creative ways marketers can leverage subscriptions is limitless. The common characteristics in autos, however, are the ability to get into a new vehicle periodically for a regular monthly payment that includes insurance and maintenance. If automakers—and others considering the model for their business—plan to accept payments via credit card, however, they must inevitably learn to handle the increased number of declines that accompany billing cards on a recurring basis.
With each reported data breach, like the one this week at Hudson’s Bay Company, banks must sometimes reissue millions of credit cards, which can result in a spike in declines for recurring billers. After the massive Equifax breach last September, one expert said that single breach could cause increased declines for subscription merchants to become a “new normal” for up to two years. Along with the usual attrition caused by expiring cards, merchants that want to leverage subscriptions using automatically recurring payments must adapt their payment systems to account for them.
At the CNP Expo in Orlando this May, email marketing firm Constant Contact will open the hood on the challenges they face using the subscription model in a card-not-present environment and steps all merchants can take to minimize their risk. The presentation, titled Reuse, Retry, Recycle: Strategies For Getting Paid as a Recurring Biller, is one of nearly 40 merchant-led presentations and panels at the CNP Expo, May 14-17 offering in-depth education and networking in the card-not-present fraud and payments space.