MasterCard Automatic Billing Updater

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1 MasterCard Automatic Billing Updater Increase revenue from recurring payments and improve customer satisfaction through seamless changes in account information AUTOMATIC BILLING UPDATER

2 Recurring payments deliver a for significant growth. Market research shows that, more and more, consumers are benefiting from the convenience, ease, and peace of mind provided by automatic recurring payments on their payment cards. The growing popularity of the recurring payments segment especially within the cable, telecom, insurance, and utilities industries represents a significant business-building opportunity for Issuers, Acquirers, and Merchants alike. RECURRING PAYMENTS MARKETING POPULARITY >CABLE >TELECOM >INSURANCE >UTILITIES

3 THE SOLUTION MasterCard AUTOMATIC BILLING UPDATER The MasterCard Automatic Billing Updater helps you maximize and maintain this dynamic growth opportunity. Easily and efficiently. An innovative recurring payments solution, the MasterCard Automatic Billing Updater facilitates the benefits of the recurring payments environment for everyone involved automatically. It filters critical data from participating issuers to registered merchants through the merchant s acquiring bank minimizing service disruptions and disintermediation. The updater helps to lock in recurring payment revenue, reduce processing costs, maintain service continuity, and strengthen cardholder satisfaction. Now, MasterCard, your best business partner, provides a comprehensive, systemic solution to better manage and grow recurring payments. A leader in innovative payment solutions, MasterCard is dedicated to providing the programs, services, and support you need to build your business. Currently, when account numbers connected with recurring payments change, merchants must contact cardholders to arrange for other means of payment. Since cardholders rarely respond to these inquiries, service is usually disrupted inconveniencing customers, disrupting revenue flows for merchants, increasing management and operating costs for acquirers, and jeopardizing brand loyalty for issuers. The MasterCard Automatic Billing Updater addresses all of these issues. By offering a multifaceted solution, it provides cost savings and reduces the customer service demands placed upon issuers, acquirers, and merchants alike. HOW IT WORKS By maintaining the accuracy of customer data, the MasterCard Automatic Billing Updater prevents disruptions due to account changes (i.e. expiration date and replacement card new account number). It extends the life of recurring payments. And it secures these ongoing, revenue-generating relationships. Automatically. 6 EASY STEPS 1 Participating issuers submit MasterCard account changes to the Billing Updater database. MasterCard AUTOMATIC BILLING UPDATER Issuer provides cardholder with new or replacement card

4 MasterCard Automatic in Billing use Updater Comprehensive support The MasterCard Automatic Billing Updater supports a broad range of account changes: Portfolio sales Portfolio flips Card upgrades Re-issued cards Lost/stolen cards Secure and private The MasterCard Automatic Billing Updater delivers maximum flexibility, security, and processing options: Leverages state-of-the-art MasterCard transmission technologies Ensures proper distribution of data through a merchant registration process Allows processing flexibility members can select various connectivity options and file transmission windows >Vanessa, Research Director Challenge A research director at a biotech firm, Vanessa welcomes opportunities to simplify her busy life. So she relies upon her MasterCard card to automatically manage several recurring payments, including her toll transponder, home Internet service provider, cable bill, and her monthly gym membership dues. A valued MasterCard cardholder, Vanessa s issuer recently upgraded her from a standard MasterCard card to a Platinum Card. However, like most cardholders, Vanessa risks an interruption in service by not providing her new account number to each of the merchants with whom she has a recurring payment agreement. Solution By creating a communications network among everyone involved from the issuer of Vanessa s new Platinum MasterCard, to the merchants who provide her with recurring payment services, to the merchants acquirers the MasterCard Automatic Billing Updater keeps everyone informed of Vanessa s new account number. Seamlessly and efficiently. Bottom Line Everyone benefits. The MasterCard Automatic Billing Updater ensures fast, easy, un-interrupted service for Vanessa. Her issuer locks in a revenue stream while increasing cardholder satisfaction and loyalty. The acquirer keeps service costs down. And the merchants eliminate declines from Vanessa s recurring payment accounts due to account changes decreasing processing costs and increasing customer satisfaction. 3 Acquirers submit these account queries to the MasterCard Billing Updater database. 2 Merchants who have registered for the program submit account number queries to their acquirers. MasterCard matches account queries to issuer submissions, then returns matches to acquirers. 4 5 Acquirers return matched account query records to the specific merchants. 6 Merchants can then update their billing files with the new account numbers.

5 EVERYONE BENEFITS How ISSUERS Benefit Provide additional card utility Reduce customer service demands Lock in revenue streams Cardholders rarely discontinue recurring payments once they assign them to their MasterCard cards. Usually, routine changes in data, such as card expirations or changes in account information, are the sole reasons why cardholders switch cards, because that s when service disruptions occur. In addition, the MasterCard Automatic Billing Updater makes portfolio flips and portfolio sales seamlessly, enabling issuing banks to protect their positions. By maintaining service continuity, the MasterCard Automatic Billing Updater allows issuers to lock in and increase revenue streams. Reduce customer service demands. Increase cardholder satisfaction and loyalty. And provide additional card utility. How ACQUIRERS Benefit Increase revenue opportunities Improve product line for merchant support Decrease service costs The management and operating costs associated with transaction denial and exception item processing are significant. Recurring payment decline rates can average 15% to 20%, a dramatic increase over the less than 5% average for face-to-face transactions.* The MasterCard Automatic Billing Updater enables acquirers to offer a value-added service that supports merchants by reducing these costs, bringing them more in line with that of face-to-face transactions. Through the automatic maintenance of accurate cardholder data, acquirers can increase transaction volume and strengthen business among current merchants with recurring payments. By offering this value-added service, acquirers can attract new merchants as recurring payments businesses grow. And increase the level of satisfaction among the merchants they work with. * According to MasterCard authorization data. How MERCHANTS Benefit Decrease processing costs Increase customer satisfaction Reduce customer turnover Merchants with recurring payment accounts face an ongoing question. How many payments will bounce back this month? Bounce-backs not only frustrate and inconvenience consumers, they jeopardize revenue flows. And they increase customer service demands by forcing merchants to contact the customer for another means of payment, or to request updated information. By reducing customer service disruptions, the MasterCard Automatic Billing Updater ensures continuous service for consumers and continuous payment for merchants. It seamlessly updates card on file account information such as car rental agencies, without impacting consumers. And it helps maintain and increase customer satisfaction and loyalty minimizing the number of customers likely to switch to another merchant. How CARDHOLDERS Benefit Uninterrupted bill payment Reliable service Greater convenience Cardholders choose recurring payments on their MasterCard cards to facilitate payments and to eliminate the burden of having to remember to pay bills on time. When recurring payments are discontinued because of account changes, cardholders usually remain unaware of the disruption until service stops perceiving the disruption as a sign of poor service. By ensuring that recurring payments continue without interruption, the MasterCard Automatic Billing Updater ensures convenient, stress-free, continuous service saving cardholders check-writing time, and late-payment charges.

6 An innovative, systemic solution, the MasterCard Automatic Billing Updater helps increase recurring payment transaction volume and improve customer satisfaction, while reducing customer service demands. For further information about the MasterCard Automatic Billing Updater, please contact your MasterCard representative today. Or us at ABU-7/ /06