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Why the CCARDA matters to subscription services

Today marks the effective day of the Credit Card Accountability, Responsibility and Disclosure Act.

Our friends at PaymentsNews posted a round up of the coverage over the weekend.

The changes that will most impact game, software, social networking, and online content companies have to do with the new requirements upon offers of credit to college students. College campuses had become one of the most effective new credit card customer acquisition tools for the credit card issuers. With the new rules, it’s going to be a bit harder for those of college age to establish new credit and thus the 18-22 year old market is going to have incrementally less buying power.

What this portends for subscription services is a shift in payment method mix to other alternates. Primarily it will mean a mix more strongly weighted toward debit cards for those services with large “under 25″ populations. This is on top of a general trend we’ve noticed after the credit contraction late last year toward debit being a larger percentage of subscription payment methods. Services should be reviewing their subscription business practices with the higher debit mix in mind.

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