Not All Credit Card Updaters Are the Same

The world of nonprofit payment processing is often complex, filled with acronyms, certifications, and moving parts. Yet, understanding key aspects of this technology is crucial for nonprofits looking to maximize fundraising revenue—especially for those with recurring donors. One such critical tool is the credit card updater (CAU).

The Big Picture: Reducing Revenue Loss in Recurring Donations

Let’s start with the bigger picture to give perspective. CharityEngine uniquely offers SustainerIQ, which is subscription billing technology for nonprofits. One key component of SustainerIQ is a credit card updater, a tool used to help collect revenue.

Nonprofits with recurring giving programs often lose 15% to 30% of their monthly donations to expired or declined credit cards or address changes. Many accept this loss as the cost of doing business. However, CharityEngine’s SustainerIQ technology addresses this issue, retaining more than 90% of recurring revenue and sometimes up to 98%. By adopting this solution, nonprofits can increase their monthly giving revenue by more than 20%.

SustainerIQ is a sophisticated blend of technologies and tools, including a credit card updater.

What is a Credit Card Updater?

Many payment processors offer a credit card updater. This system automatically updates credit card information (such as expiration dates or new card numbers) to ensure that recurring donations continue without interruption.

How does this work? The banks that issue credit cards voluntarily provide card updates to payment processors, allowing them to update expired cards and push payments through. The result is that your nonprofit won’t lose those payments due to declines.

The benefits of having a card updater included in your payment processing ecosystem are clear:

• Reduced failed payments: Prevents losses due to outdated card information.
• Improved donor experience: Donors don’t have to update card details manually.
• Increased revenue retention: Retains significant revenue that might otherwise be lost.

Are Credit Card Updaters Necessary for Nonprofits?

If your nonprofit doesn’t have a monthly giving program, we’d first say that you should probably carve out the time to start one. A robust monthly giving program can give your nonprofit predictable revenue, even during shaky economic times. It can ensure you have a loyal and engaged donor base that pays dividends well beyond the financial benefit.

But, to answer the question, you do not need a credit card updater if you do not have a monthly giving program. You also do not need subscription billing technology or anything other than straight-up payment processing.

However, a credit card updater is critical to your success if you have a monthly giving program, even a growing one.

To show you how substantially a monthly giving program can impact your nonprofit, we tell prospective clients with at least 50 monthly donors that our software will pay for itself within the first year. If you read between the lines, it’s saying that we are so confident in our technology’s ability to maximize revenue that you’ll increase your fundraising by an amount greater than your SaaS fee in a year…meaning a lot of funds raised for your nonprofit.

Why Aren’t All Credit Card Updaters the Same?

In short, it’s not required that any card network or issuing bank participate, and at no given point can you be certain every bank, and therefore every card, is represented. So different credit card updaters will access information at different times. Here’s a closer look at some differences to consider:

• Access and Partnerships: Different payment processors have different levels of integration and partnership with card networks. For example, American Express offers its own internal card updater, and AmEx must approve you to access it. CharityEngine has been approved to update American Express cards, but many payment processors have not.
• Update Mechanisms: Some systems push updates to nonprofits, and some require nonprofits to request data. Some payment processors update in real time, and some update monthly. Some have automated processes, and some require manual help…it’s important that you ask the right questions so you know what you’re getting.
• Covered Updates: There are a lot of reasons cards can change, and different updaters might limit what information they’ll cover. Card numbers, expiration dates, and account holder addresses can change, or accounts can close, and card brands can switch. Banks can be bought or sold.  
• Success Rates: These card updaters, which average a 15%—40% success rate, can’t all promise the same results. Between network coverage, update frequency, and processing logic, nonprofits can expect wide swings in their results. It’s worth noting that CharityEngine’s CAU has a YTD success rate of 52.37%.
• Cost Structure: Some card updaters are part of a bigger solution, like SustainerIQ and some other payment processing solutions. Others offer per-transaction fees, monthly subscription costs, or pricing tiers.

What’s the takeaway for nonprofits? As always, it’s to be an educated shopper and ask the right questions to ensure you’re getting the right solution for your nonprofit.

The Final Word: Credit Card Updaters are Essential, but Not Everything

No credit card updater can promise to update every card 100% of the time. The underlying card network ecosystem is complex and participating banks change. Don’t fall for it if anyone tells you a card updater is all you need to retain all your lost monthly revenue. It’s helpful, and it can retain a big chunk, but it’s not the only thing you need.

And you know something that even industry veterans might not: American Express cards can be updated, just not by every payment processor.

Credit card updaters are a critical tool for nonprofits trying to retain as much monthly giving revenue as possible. But that’s not all you need. Look for an entire billing system, like SustainerIQ, that combines many features (including a card updater!) to retain almost every penny.

Nonprofits should no longer accept the loss of monthly donations as the “cost of doing business.” With the right technology in place, you can retain more of your hard-earned donations and better support your mission.