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Expired Cards

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Chris Hutchinson

12 Jan, 2012 01:55 AM

When a user subscriptions has a payment method with a card that is about to expire does cheddargetter/cheddargateway still try to run the transaction or does it not try and cancel the subscription right away?

I'm asking because I read this recently and was surprised to learn that payments would still go through http://www.braintreepayments.com/blog/credit-cards-arent-like-milk-...

1. Support Staff 1 Posted by Marc Guyer on 12 Jan, 2012 02:15 PM

   

   Hi Chris -- Yes, CG auto-cancels a subscription which has an expired payment method as of the bill date of the invoice. In other words, if the customer does not update their card before the next bill, the subscription is canceled. CG provides automated email reminders to subscribers with expiring cards to help with this.

   I've seen numbers like Braintree's before. The reason why only 66% of transaction attempts on expired cards fail is because they're supposed to fail. Any processing entity, financial institution, gateway or other service provider may be violating credit card association rules when honoring an expired card. Shifted liability issues are likely in the event of fraudulent transactions on expired cards.

   In short, we're not comfortable with doing that. More research needed.

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2. 2 Posted by Chris Hutchinso... on 12 Jan, 2012 03:01 PM

   

   So what Braintree is doing is wrong? I also read a talk from Recurly recently that stated:

   Expiration Dates

   Here’s an industry secret – expiration dates usually don’t matter as long as they’re in the future. Several years ago, the credit card companies and utility companies came to an understanding about expiration dates — it’s much easier to setup auto-pay for recurring payments if the expiration date doesn’t matter. The banks understand that if your card is stolen, they can just change the number — there’s no point in having it stop working because of an expiration date.

   If you store the expiration date with the credit card information in a payment gateway (e.g. Authorize’s CIM), that card will stop working after the expiration date. You cannot move it forward unless you collect the user’s credit card number again. But if your billing system is smart enough, perhaps it can try moving the current expiration date forward before asking the user to update their payment details when the card expires.

   http://blog.recurly.com/2010/01/lessons-learned-in-online-subscript...

   Is Recurly doing it wrong too? In the comments a guy using Braintree states you can change a customers expiration on their system.

   Also:

   http://blog.recurly.com/2011/08/the-recurly-advantage/

   Recurly also leverages continuous authority, whenever possible. Continuous authority allows Recurly to continue charging a credit card on your behalf, even after its original expiration date has passed. For gateways that do not support continuous authority, Recurly is able to submit an updated expiration date for expired cards. Most issuing banks will accept the updated expiration date on recurring transactions.

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3. Dean closed this discussion on 18 Jan, 2013 04:06 PM.