What is an Account Updater?

An account updater in payments is a service offered by credit card companies and payment processors to help businesses automatically keep their customers' credit and debit card information up-to-date.

Here's a breakdown of what it is and how it works:

What it does

• When a customer's payment card expires, such as the card replaced due to loss or theft, or the account is closed or upgraded, the account updater service automatically updates these details in the business's system.
• The automatic update happens without the need for the customer or the business to manually track down and update the information.

How it works

1. Enrollment: Businesses typically enroll in an account updater service through their payment processor or gateway.
2. Data Submission: The business periodically (e.g., monthly or upon a failed transaction) sends a batch of their stored cardholder data to the account updater service. This usually includes card numbers and expiration dates.
3. Matching and Verification: The account updater service compares this data against the card networks' (Visa, Mastercard, etc.) databases, which contain the most current card information provided by the issuing banks.
4. Automatic Updates: If any of the submitted card details have changed, the account updater automatically updates the information and sends the updated details back to the business through their payment processor. Common updates include new expiration dates, new card numbers, or notifications that an account has been closed.
5. Record Update: The payment processor then updates the business's records with the new card information, allowing for uninterrupted processing of future transactions. Some systems offer real-time updates.

Benefits of using an account updater

• Reduces declined transactions: By keeping card details current, businesses can significantly decrease the number of failed payments due to expired or outdated cards.
• Improves customer experience: Customers don't have to manually update their payment information with every business with which they have recurring payments or stored cards with, leading to a smoother and more convenient experience.
• Increases revenue retention: Fewer declined payments mean less involuntary churn for subscription-based businesses and more successful repeat purchases.
• Reduces administrative burden: Automating the update process saves businesses significant time and resources that would otherwise be spent manually tracking and contacting customers for updated card details.
• Enhances data security: By relying on secure channels for updating card information, businesses reduce the risk associated with manually handling and storing sensitive cardholder data, potentially reducing their PCI DSS compliance scope.
• Helps prevent fraud: Promptly identifying closed or replaced cards can help businesses avoid fraudulent transactions on compromised accounts.
• Improves operational efficiency: Customer service and finance teams spend less time dealing with failed payments and chasing updated information.

Account updater services are particularly valuable for businesses that rely on:

• Recurring payments and subscriptions: Ensures continuous service and revenue flow.
• Card-on-file for future purchases: Provides a seamless checkout experience for returning customers.