Fintech Stripe Expands Network Tokens, Card Account Updater to Improve Conversion

Stripe, a financial infrastructure platform for businesses, announced the expansion of its network tokens and card account updater in partnership with Visa, Mastercard, and American Express.

Together, these features “help businesses protect revenue, increase authorization rates, and reduce the churn that occurs when customers’ credit card details change.”

Last year, approximately 40% of cardholders “replaced their cards as a result of the card expiring, getting lost, or being compromised by fraud.”

When this happens, most customers “don’t update their card details with the businesses where they’ve stored payment information.” This results “in declined transactions, lapsed accounts, and canceled subscriptions, which frustrate customers and leave businesses with billions of dollars in lost revenue.”

Primary account numbers (PANs) are “the 15- or 16-digit numbers found on every credit or debit card. A PAN is widely accepted across businesses, making it easy to transact online.”

Stripe works “with payment networks to create network tokens, which are a secure, nonsensitive substitute for PANs that enable successful transactions even if underlying card details change.”

For example, if a customer’s card is replaced, Stripe is able “to continue using select network tokens that are always associated with the most recent card details, without the customer having to update their payment information.”

Network tokens serve “as a durable link that creates higher authorization rates for businesses and better security for cardholders.”

With today’s expansion, Stripe will “enable businesses in 36 new markets across Europe, North America, Asia Pacific, and Latin America to leverage network tokens to increase acceptance rates, all without modifying their payments setup or performing any extra integration work.”

The expansion is in partnership with Visa and Mastercard, and will “include a partnership with American Express.”

As noted in the update, many factors “affect payment acceptance rates across issuers, including for some issuers, whether the attempted charge is made using a network token or a PAN.”

To maximize approval rates, Stripe maintains “a secure vault of PANs and intelligently selects whether to use a network token or a PAN for a given transaction.”

When a PAN is used, card account updater “automatically retrieves the latest card information for any expired or reissued cards.” In this way, network tokens and card account updater work together “to protect billions of dollars in revenue for businesses and ensure a seamless experience for customers.”

Doist, which builds subscription-based productivity software, uses both features.

Menghan Zhong, head of finance at Doist, said:

“Our most popular app, Todoist, operates on subscription revenue from hundreds of thousands of users around the world. As a global business, even a slight interruption to our payments model can mean thousands in lost revenue. Stripe’s network tokens and card account updater tools help ensure we don’t encounter that problem, and enabled us to increase subscription auth rates by over 4%.”

Real-time updates are “an enhancement to Stripe’s card account updater, which can now renew credentials at precisely the moment a transaction is being processed.”

This means more cards are “updated when it matters, so customers never miss an issue of an important subscription or the latest episode of their favorite show.”

Stripe now “offers real-time updates for Visa in the UK and Europe, and Mastercard globally. Stripe will expand its coverage of card account updater for American Express cards in 10 more countries over the next few months.”

Tom Holman, head of product for cards acquiring at Stripe.

“Every business wants the same thing: for their customers to complete a purchase quickly on the very first try. There are many legitimate reasons why a transaction might fail, but outdated card information shouldn’t be one.”

Network tokens and card account updater “are part of Stripe’s suite of payments optimization tools, which also includes Adaptive Acceptance, Smart Retries, and Enhanced Issuer Network.”

They work together “to help increase authorization rates and reduce false declines for businesses.”

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