July 8, 2009

Improvements to the Recurring Billing Process

Posted by 2Checkout Category Icon2Checkout

*UPDATE* As of September 23, 2009, the improvements to our recurring billing processes have been implemented.

2Checkout is happy to announce some upcoming changes in our recurring billing processes. These changes include a better way to handle expired credit cards to increase successful recurring installments, an updated retry schedule to convert more of your declines into successful authorizations quicker, and an increase in the authorization period of recurring installments to reduce fees suppliers may be charged for refunding a customers recurring installment. Detailed below are the changes and benefits that suppliers can look forward to.

Billing Expired Cards

When a recurring sale installment is attempted and the credit card on file has expired, 2Checkout will now attempt to correct the expiration date on behalf of the customer. Once the expiration date is corrected for a future date an authorization attempt will be made. If this attempt is successful the billing will continue as normal and both the supplier and customer will be notified of the successful recurring billing. If the authorization attempt is declined by the bank we will send the customer a notice that the billing has failed due to the response from the bank. We will also inform the customer that their card on file appears to be expired and recommend that they update their billing information. Suppliers will benefit from fewer declines due to expired cards which means customers will have less of a chance that their service will be interrupted.

New Retry Schedule

A recurring sale installment can be declined for many reasons. In the past we would retry the majority of declines 7 days later and continue to attempt to bill the card every 7 days. Now we will attempt many decline reasons the following day instead of waiting a full week to try again. We hope this will result in a quicker turn-over of declined sales without the need for the card to be updated to try before 7 days. This also means that fewer customers may need to update their card in order to have another attempt made, making for a happier customer and less loss of service due to a decline. Certain decline reasons we would never try to bill again until the customer has updated the credit card. These could include reasons such as the card being reported stolen, the issuer asking for the card to be returned or the card has expired. These types of declines will continue to behave the same way and will not be attempted until the customer has updated their billing details.

Increased settlement period

When a new 2Checkout sale is created, weather it be a recurring sale or a one time billing, and the customer pays using a credit card the sale is locked into an authorization period which lasts 48 hours. This means for the first 48 hours the sale remains in a pending status until it is deposited into the account. From now on all recurring installments will have a 48 hour authorization period before the installment settles and deposits into your 2Checkout account. Once a sale moves into deposited status 2Checkout fees are calculated and collected for that sale. Increasing the recurring installment authorization period gives suppliers a much larger window of opportunity to cancel an installment and not be charged the associated 2Checkout fees that are collected once the sale deposits.