EDCR 2.0 - Keeping Payment Continuity and Efficiency
Card issuers and holders need clear guidance to navigate the ever-changing digital payments ecosystem. Issuers, in particular, must understand how to prepare their infrastructure for both current and future developments within the payments landscape.
This is why Visa prioritised Integrity of Network and Ecosystem as part of the update to its Enabling Digital Commerce Roadmap in 2024. The aim is to minimise authorisation decline rates – which can be a particular problem with cross-border merchants for whom digital commerce is even more important – by enabling issuers to update card credentials on the move.
With customers increasingly willing to keep their card on file with merchants, and three in ten Primary Account Numbers (PANs) or expiration dates requiring a change every year, addressing this issue is crucial. Declined transactions can lead to service delays or even cancelled services for customers, while merchants can suffer from lost business, brand reputation damage, and increased operational costs.
Eliminating unnecessary card declines
A report published last year found that false declines rising globally. More than four in ten shoppers reported having a payment wrongly declined in the previous three months, and 40% said that they wouldn't retry a purchase if it was declined the first time1. "It's in the interests of merchants to be able to avoid unnecessary card declines, not just to boost their profits, but also to keep customers happy and keen to return," says Godfrey Sullivan, Head of Product, Partnerships and Digital Solutions, CEMEA.
Simplifying portfolio management
So how can issuers make an often-complicated portfolio management easier to navigate? One solution is Visa Account Updater (VAU). This service enables a more seamless payment process and simplifies portfolio management by allowing account information updates to be securely exchanged electronically between participating Visa card issuers and acquirers for credential-on-file merchants. When participating issuers reissue cards, they submit the new account number and expiration date to VAU, along with any information on whether an account is closed, or a cardholder has opted out.
Participating merchants can then send inquiries on their credentials-on-file to VAU through their acquirers, after which they will be given updated card information, if available. This means that acquirers can proactively update buyer cards before any purchase transaction is processed or declined. VAU makes portfolio management simpler for participating issuers and helps them keep cardholders happy by maintaining the continuity of their payment relationships with participating merchants.
Currently, hundreds of merchants across the globe including key global merchants which generate a huge portion of cross border recurrent transactions get cards’ updates from VAU. Having integrated with the service, CEMEA issuers will be able to send card updates to those global card-on-file merchants to significantly enhance the user experience and reduce the number of declined transactions.
Adapting to the future of commerce
"Enabling Digital Commerce Roadmap in CEMEA, we expect it to improve the payment experience for customers, merchants and issuers alike" says Godfrey Sullivan. "VAU means that issuers should see fewer declined transactions, improving payment volumes and creating a much more seamless payment process."
By focusing on solutions like Visa Account Updater, Visa is equipping financial institutions with the tools they need to meet modern consumers' demands. These solutions enhance the payment experience, ensure the reliability of card-on-file transactions, and provide a seamless, secure, and efficient payment ecosystem. As digital transformation continues to unfold, the adoption of Digital Commerce Roadmap (EDCR 2.0) will be instrumental in shaping a more inclusive and efficient payment ecosystem in the region.
To learn more about the strategic themes under EDCR 2.0 please see our dedicated deep dives below:
- Enhancing the Flexibility of Payments in CEMEA
- Cutting Edge Solutions for Seamless and Secure Transactions
- Building the Infrastructure for Faster Payments
Hear more from Visa's Godfrey Sullivan and Dan Baxter on the opportunities of EDCR 2.0 here.
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1Forter: Consumer Trust Premium Report
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