millions of americans pay for streaming services, donate anywhere from $5 to $75 per month. It's a common belief that switching credit cards will free you from these recurring charges. The streamer won't be able to find you and your account will just be deleted, right? It might be a good idea to believe it, but it's a myth that switching your credit card will definitely result in a suspension. recurring fees.
According to , nearly 46% of Americans opened a new credit card in the last year. forbes, which means millions of Americans have also canceled their old ones. When you switch cards, these streaming services simply stop serving you and start charging your new card. Sure, it might be easier to cancel your subscription directly with a streamer like Netflix. There is a mostly hidden service that allows most subscription services to continue charging you indefinitely.
„Your bank may automatically update your credit or debit card number when a new card is issued. This update allows you to continue charging your card even after it expires.“ Netflix states in the article. Help centerHowever, this is not the only feature.
Most major card providers, including Visa, offer features that allow you to do this. According to 2003 documents, in his 2003, Visa USA began offering merchants a new software product called Visa Account Updater (VAU). american banker article. The service works with a network of banks to create a virtual tracking service for Americans' financial profiles. Whenever someone renews or switches credit cards within the bank, the financial institution automatically updates her VAU. This system allows Netflix and countless other companies to charge any card you have on file. This is a seamless switch, without us having to lift a finger, and allowing dollars to continue flowing to American businesses.
„Visa understands the challenges merchants face in staying on top of changes to account information,“ Visa said. marketing materials To companies. “VAU provides up-to-date cardholder account information in a timely, efficient and cost-effective manner, benefiting all parties involved in the electronic payment process.”
VAU was an instant success and was quickly adopted by banks and corporations around the world. Visa's services follow as you switch issuers between major credit card providers, including Discover, Mastercard, and American Express. However, if you close your account permanently or change to another credit card provider yourself, VAU will simply list your account as closed.
According to sources, customers of Visa's tracking service include Netflix, Amazon, Facebook, Google, Disney, and more. List of software adopters (page 256) While VAU allows merchants to lock customers into a subscription service, Visa claims it also helps customers.
„Visa Account Updater (VAU) was built to ease the burden on consumers of entering new account numbers and expiration dates on their subscriptions,“ a Visa spokesperson said in a statement to Gizmodo. .
Visa is not entirely wrong in this regard. If your electricity or internet bill is tied to a credit card, forgetting to update your new card can leave you in big trouble. But such practices can also lock people into endless payment cycles that continue no matter where they are.
“The issuing bank will decide whether to provide updated card information, a closed account or cardholder advice through VAU,” the spokesperson said. “VAU only provides information to merchants as directed by the issuing financial institution, and only to merchants where the cardholder already has payment credentials on file.”
origin of myth
Before services like VAU came along, switching credit cards was a pretty surefire way to escape recurring charges, whether you wanted to or not. When Bank of America adopted his VAU in 2003, the company described the product as a solution to billing changes that once left merchants with „unattractive options.“
„One would be that merchants would stop servicing their customers,“ Bank of America executives said in a 2003 report. press release. “The other option is for the merchant to continue providing service but potentially sending an unpleasant letter to the customer.”
So VAU was actually born with the beginning of the Internet. Such behavior has become increasingly common in the Internet age. Subscription services have become easier to start, but increasingly difficult to stop. Unless you contact the company directly to stop them, recurring charges can truly continue to the ends of the earth.
Why is it so popular?
Visa's Account Updater is only sold to businesses, so most consumers don't know it exists.I'm sure most people don't know that there is such a method. Opting out of Visa's credit card tracking serviceThis is a largely hidden service to the general public, and there are no clear indications from your bank or subscription service that you are being tracked in this way.
Credit cards are also widely seen as a more anonymous way to navigate the financial world. Although it's usually more secure than using a debit card, keep in mind that your bank will still be tracking your every move. VAU simply allows us to work with businesses to keep their financial information up to date.
VAU definitely offers several benefits to consumers. However, it is important to understand why. This system reduces 'churn' for businesses and allows them to continue to be paid out, no matter what is going on in the financial world. Banks make it easy for you to keep paying these recurring charges. However, stopping them can be much more difficult. If you really want to stop your subscription, the only option is to call the company and cancel.