As merchants continue to shift their business models towards subscription and recurring offerings, the importance of maintaining continuity in the billing process is reaching mainstream media attention. NPR's Kai Rysdall and Amy Kiley covered the topic in a piece that aired yesterday on Marketplace.
Recurly has been observing credit card error and decline patterns for years. With this perspective, we seen an observable increase in the percentage of 'Invalid Card Number' error since the major breaches were announced in mid December. In Q4 of 2013, 0.5% of credit card transactions resulted in 'Invalid Card Number' declines. The chart below indicates an increase to an average of 0.7% of transactions with the same decline type in the following quarter. While this may not seem like a significant change, it represents a 26% increase in the proportion of this error type Qtr/Qtr.
Business owners like Rocky Arbitell, covered in this interview feel the direct impact of credit card declines interrupting the continuity of their recurring billing. If your business relies on recurring billing via credit card transactions, you are also likely experiencing some impact from consumer cards being continually replaced as part of ongoing efforts to protect consumers from fraud.
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The value of Recurly is that we no longer have to worry about the different aspects of subscription management. Instead, we can focus on things that are our core competency, like adding value to our service and expanding our offering. That’s been a huge win for us.