UK retailers must look to adopt new technology allowing consumers to update card details seamlessly, or risk losing out on £4.3billion annually according to new research conducted by Opinium for Acquired.com, a payments business focused on recurring commerce.
When a payment card expires for whatever reason (card expiration, loss or theft), customers are prompted to update their payment details. However, this gives customers the perfect opportunity to reevaluate their needs for a service, given how simple it is to cancel it.
According to American Express, cards stay active for between three and five years on average, meaning retailers could be losing customers on a regular cycle, just due to outdated information.
Commenting on the findings, Eline Blomme, chief strategy and product officer at Acquired.com commented: “Keeping payment details up to date has traditionally been a challenge, often leading to unnecessary consumer friction. When retailers ask customers to manually update their card information, there’s also a risk that the customers will not get around to doing it.
“But payment technology can help with this. Account Updater and Network Tokenization enable card details to be updated automatically whenever a card is replaced or renewed. This eliminates the need for retailers to prompt customers for updates, reducing the risk of losing subscribers due to expired or changed payment details. Despite these benefits, adoption remains surprisingly low.
“Many businesses either don’t prioritise these features, fully understand their benefits, or have the technical resources to implement them. For businesses that rely on recurring payments, partnering with a payments provider that offers both features presents a valuable opportunity to enhance customer experience and boost revenue.”
Breaking down the findings
Nearly two in five (38 per cent) of adults in a nationally representative survey responded that they have cancelled a subscription in the past because they have been prompted to update their payment details. For those cancelling, this represents an average loss for retailers of £210 per adult annually, a significant loss of £4.3billion annually when scaled nationally.
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