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The Consequences of Expired Payment Info

The Consequences of Expired Payment Info

Blog Article Published: 09/28/2023

Originally published by TokenEx.

Written by Valerie Hare.

Ecommerce businesses lose $18 billion in sales revenue every year due to cart abandonment. 30 percent of shoppers will abandon their cart if they have to re-enter their credit card details.

Since most credit cards expire after three to five years, the need to update payment information is inevitable. Cards expire to protect against wear-and-tear, fraud, and ensure cardholders use the most up-to-date payment technology. While this is good for customers, ecommerce businesses can suffer when they lose revenue and business due to outdated payment information. In this article, we’ll discuss the consequences of expired card information and some recommended payment solutions to address this ecommerce payment challenge.

Quick Hits:
  • Credit cards expire after three to five years, a standard to protect against fraud and wear and tear.
  • Outdated card information can cause several consequences for ecommerce businesses, from revenue loss to brand reputation harm.
  • Luckily, there are ecommerce payment solutions to prevent these common payment issues.

Expired Credit Card Consequences

When credit cards expire, this can affect an ecommerce merchant in several ways, from increasing churn and cart abandonment to losing recurring revenue. Churn rate measures the number of customers that stop doing business with a company over a specified time. Cart abandonment is when someone starts a checkout process but leaves before completing the transaction. Ideally, it’s best to have low churn and cart abandonment rates.

Outdated cards can result in the following:

  • Product and service interruptions.
  • Recurring payments are canceled.
  • Repeat customers may not want to deal with updating their card information.
  • Customers may decide to do business elsewhere or cancel subscription services.
  • Brand reputation is harmed due to one or more payment declines.
  • Revenue loss.

Depending on the type and size of your company, expired card information can significantly impact your revenue and business growth. If recurring or subscription payments make up a big chunk of your revenue streams, failed payments can eat away at your profits. Repeat customers will not enjoy interruptions from their favorite products and services. After a few failed attempts to complete a purchase, they may give up and use a competitor instead. It is estimated that 20 to 40 percent of overall churn is involuntary due to payment issues and that only 5 percent of these customers will return.

How to Update Credit Card Expiration Dates

Are you tired of failed payments due to expired cards? What about losing revenue and customers? Third-party ecommerce payment solutions can help.

Maximize Your Profits

False declines are unpleasant for customers and your business – customers can’t complete their purchases, and you lose sales. Third-party providers can update expired cards and prevent payment declines before they occur. That way, you can provide seamless recurring transactions that maximize your profits.

Improve Your Customer Experience

No one enjoys it when their product or services are canceled. Customers will likely feel frustrated and may lose their trust in your brand. Third-party providers can help improve your customer experience by ensuring customers continue receiving their products or subscriptions as expected.

Update Cards Without Introducing PCI Scope

PCI DSS compliance is a requirement for businesses that accept, handle, and process card data, such as those in the ecommerce industry. Non-compliance can result in hefty fines and legal issues. However, third-party providers can update sensitive cardholder data outside your internal environment. This means you can refresh payment information without introducing PCI scope. It’s a two-for-one solution!

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