Visa U.S.A. is offering new software that automatically supplies merchants with updated account information for customers who have a credit card on file for recurring or occasional payments.
The company said last week that its Visa Account Updater is designed to automatically supply, for example, the correct expiration date for an account that has been renewed. (Normally, customers attempting to make a purchase would be prompted to supply such information.)
The product has been tested by several large credit card issuers, including Bank of America Corp., Bank One Corp., FleetBoston Financial Corp., and Capital One Financial Corp., and by 50 merchants, including AOL Time Warner Inc. All merchants and issuers can use it for free at least until Jan. 1, when Visa says it will consider charging a fee. Merchants would then order it from their acquirers.
"Account numbers and expiration data periodically change," said Laura DiGioacchino, the vice president of acceptance at Visa in San Francisco.
Merchants, including Internet service providers, routinely keep card information on file and must contact customers when the account expires or is closed, Ms. DiGioacchino said. Often, merchants do not contact customers until a transaction is declined.
Each year the account information for more than 55% of cards changes in ways that could result in a declined transaction, according to Visa.
Last year American Express Co. began offering a similar service, Billing Watch, to U.S. merchants at no cost, according to a spokeswoman. It charges a fee in other countries.
An executive at MasterCard International said its Automatic Billing Updater was introduced about a year ago.
