Visa Account Updater & Stop Service Direct Response Forum Europe 25 April 2006

Visa Account Updater & Stop Service

Direct Response Forum Europe

25 April 2006

Presentation Identifier.2Information Classification as Needed

Introduction - Agenda

•Regular Payments Initiatives

•Overview of VAU & Stop Service

•Merchant Feedback

•Stop service


Regular Payment Benefits

Cardholders

Easy to set up and convenient for remote environments - Internet

Members

Cuts costs of cheques.Improved customer service.

Visa

Increased transaction volume

Merchants

Easy mechanism to initiate remote payment and improved renewal rates

Convenience


Existing card scheme solutions have evolved over 30 years and do not necessarily meet the requirements of all parties:• merchants often hold invalid card number information

• this leads to high decline rates (circa 30%) and chargebacks (up to 20 x face-to-face)

• difficult to stop Regular Payments – regulatory impact

Cardholder and merchants are becoming reluctant to use card based Regular Payments

But there are problems


Visa Europe’s response

Tactical Improvements• Rule changes to facilitate volume growth e.g. recurring

transactions cannot be declined for invalid expiry date• Summer 2004 3 UK credit Issuers undertook a refresh of card

numbers for 5 Regular Payment merchants. – Provided a statistically high level of either refreshed card

numbers (18.5%) or confirmed to merchant that they were currently using the most recent card number

– Demonstrated the value of developing an automated mechanism to refresh card numbers

Strategic Improvements• Build an automated service to refresh merchant card number

databases and provide a mechanism to stop Regular Payments


How does the VAU / Stop Service Work?

VAU / StopService

Acquirer

Merchant

Issuer Card Management

System

IssuerCustomer Service

Centre

Batch card number updates

(minimum monthly)

On-line stopinstructions

Submission of enquiry file

(merchant determinesFrequency)

Acquirer submitsenquiry on

merchants behalf

Merchant receives• Refreshed number or• Confirmation of existing number • Details of any stop transactions


UK Operating Regulations

The following proposals were approved by the Visa UK Board

By April 2006

• All UK Issuers (Credit & Debit) for participation in VAU & Stop service

• All UK Acquirers that acquire recurring transactions for participation in VAU Stop service

• All UK Acquirers to register their RT merchants on the VAU Service


Merchant Feedback - Visa Account Updater

Very positive feedback. Will help with decline and chargeback situation

Like getting a response on every card number.

Would be useful to get policy number back with the updated card number

This could solve the majority of problems


Stop service

Insurance companies want to provide policy number. This is key to recognising customers. They would be happy to perform enquiries after the initial set –up.

Merchants see advantage of Stop facility as early warning of customer dissatisfaction.

Having the policy reference number is important as they will use it to double check that the customer wants to stop the policy/service

The Stop ServiceOverview of the VAU Stop Service


Stop Service

This slide explains how the Issuer is able to stop a recurring payment on one of its account numbers.

VAU MerchantDatabase

Merchant and Account information from the

Acquirer enquires is copied to the Merchant database.

Œ

The Issuer inputs the card that they want to place the

Stop on using the Stop Service on Visa Online.

All the Merchants and Policies associated with the card from previous Acquirer traffic is returned.

Ž•Acquirer

Card Issuer


Back

Enter PAN Number:

Continue

Stop or Resume Policy

Issuer Reports

Home

Stop or Resume Recurring Payment

4xxxx11230000001



Issuer Reports

Home

Stop Advices for Card 4xxxx11230000001 Stop Card

Merchant / MPRN

Status Last billed Date Stopped

Date Resumed

Stop or Resume

AOL Active

AOL01203 Active GBP 24.00

AOL01204 Stopped USD 85.00 18.5.2005

Sky Stopped 21.3.2004 14.7.2006

AA Active

AACARD198 Stopped EUR 753.00 17.11.2004 8.9.2005

AAHOME192 Active USD 15.00

Stop

Resume

Stop

Resume

Stop

Resume

Stop



Issuer Reports

Home

Stop All Recurring Payments on Card

PAN Number4xxxx11230000001

Start Date of Stop End Date for Stop (optional)

25/05/2005

CancelConfirm



Issuer Reports

Home

Stop Advices for Card 4xxx11230000001 Stop Card

Merchant / MPRN


Date Resumed

Stop or Resume

AOL Active


AOL01204 Stopped USD 85.00 18.5.2005

Sky Stopped 21.3.2004 14.7.2006

AA Active



Stop

Resume

Stop

Resume

Stop

Resume

Stop



Issuer Reports

Home

Stop All Recurring Payments for Merchant on Card


MerchantAOL


25/05/2005

CancelConfirm



Issuer Reports

Home

Stop Advices for Card 4xxxx11230000001 Stop Card

Merchant / MPRN


Date Resumed

Stop or Resume

AOL Active


AOL01204 Stopped USD 85.00 18.5.2005

Sky Stopped 21.3.2004 14.7.2006

AA Active



Stop

Resume

Stop

Resume

Stop

Resume

Stop



Issuer Reports

Home

Stop a Recurring Payment for a Merchant on Card

Cancel


MerchantAOL

MPRNAOL01203


Confirm

25/05/2005


Summary

A large sector opportunity exists for Visa and its Members

Strategic solutions have been designed and are available to be rolled out on a market by market basis

Opportunity to implement VAU new operating regulations in any Visa Europe market. Initial Market is the UK, followed later this year by Ireland

Thank you

Documents

Visa Account Updater & Stop Service Direct Response Forum Europe 25 April 2006