EMV’s Role In Increased Card Declines On Subscriptions In 2015

Jul 26, 2016

According to a new report released by Recurly, a recurring-billing technology provider based in San Francisco, card declines on subscriptions averaged more than 12% in 2015. The company analyzed 25 million transactions over the course of 2015 to provide its analysis.

Card Decline Increase

As Recurly reports, the EMV rollout was the main reason for the increase. The analysis also revealed that declines grew throughout 2015, averaging almost 16% in the fourth quarter. The company finds seasonality could also play its role in such increase.

The authors of the report note that Q4 of any year featured increased retail activity since consumers started making their holiday purchases and the balances on their credit cards increased.

There is also another factor that played its role in the latter part of 2015. It has to do with the fact that cardholders received new credit cards with additional security measures to fight point-of-sale (POS) fraud. These cards came with new expiration dates. What is more, in many cases, they were designed with new security codes. On a side note, if this information is not updated, transactions can be declined.

Churn and Found Subscriptions

To enjoy safe and secure payment processing, merchants should turn only to reliable processors in the filed like eMerchantbroker. EMB is voted the #1 high risk merchant account provider in the US and boats an A+ rating with BBB. EMB offers unmatched protection from fraud to help merchants reduce chargebacks and increase revenue.

The report presented by Recurly focused on churn and found subscription merchants as well. It was found out that these merchants were likely to lose around 10% of their business to attrition within a typical year.

According to the report, churn rates grew at the beginning of the year. B2C businesses had higher churn rates than the average, which was 11.2%. B2B churn rates were a bit lower than the average. 20% of the total churn was not found to be on purpose, meaning invalid card information on file could be the reason for these subscriptions to be canceled.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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