Millions of Americans pay for Netflix, with expenses ranging from $6.99 to $22.99 per month. It’s common knowledge that canceling your credit card can help you avoid recurring charges like this. Then Netflix can’t find you and your account just disappears, right? You wouldn’t be crazy if you believed it, but it’s a myth that canceling a credit card will stop your account Recurring Compensations.
According to this, almost 46% of Americans opened a new credit card last year Forbes, meaning millions of Americans have also canceled old ones. If you switch cards, Netflix will not only stop your service but also start charging your new card. There’s a largely hidden service that allows Netflix and most other subscription services to charge you indefinitely.
“Banks can automatically update credit or debit card numbers when a new card is issued. “With this update, your card can continue to be charged even if it has expired,” Netflix’s statement said Help Center.
You can thank Visa for that. According to a 2003 report, in 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, cancels or opens a credit card, banks automatically update the VAU. This system allows Netflix and countless other companies to charge any card you have on file. It’s a seamless transition that allows dollars to continue flowing toward corporate America without you having to lift a finger.
“Visa understands the challenges merchants face when it comes to staying up to date on changes to account information,” Visa says Marketing materials to corporations. “VAU delivers updated 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 companies around the world. Visa says its service helps you switch between a major credit card provider, be it Discover, Mastercard or American Express. According to a, customers of Visa’s tracking service include Netflix, Amazon, Facebook, Google and Disney 256-page list of software users starting in 2022. VAU allows merchants to lock customers into their subscription services, but Visa also argues that it helps customers.
“Outdated account information can result in declined transactions and inconvenience for cardholders – and ultimately poses the risk of service termination and customer dissatisfaction,” Visa said in marketing materials.
Visa has a point. If your utility or internet bill is tied to your credit card, you could be in big trouble if you forget to update your new card. However, practices like these can also leave people trapped in endless payment cycles that follow them everywhere.
Visa did not respond to Gizmodo’s request for comment.
Origins of the myth
Before services like VAU came along, switching your credit card was a pretty surefire way to avoid recurring fees, whether you wanted to or not. When Bank of America introduced VAU in 2003, it described the product as a solution to billing changes that once offered merchants “unattractive options.”
“One would be for the merchant to turn off customer service,” a Bank of America executive said in a 2003 report Press release. “Another would be for the dealer to continue the service but send the customer a nasty letter.”
VAU only came into being with the advent of the Internet. Practices like these are becoming increasingly popular in the Internet age. Subscription services are easier to start but increasingly difficult to stop. Recurring charges can really follow you to the ends of the earth unless you contact the company directly to stop them.
Why it is ubiquitous
Visa’s Account Updater is actually only marketed to businesses, so most consumers have no idea it exists. I bet most people have no idea there is a way Disable Visa credit card tracking serviceand even fewer know that they are enabled by default. It is largely a hidden service for the average person, with no clear indication from your bank or subscription service that you are being tracked in this way.
Credit cards are also generally viewed as a more anonymous way to navigate the financial world. While they’re typically safer than using a debit card, make no mistake: banks still track your every move. The VAU simply allows you to coordinate with companies to keep your financial information constantly up to date.
The VAU undoubtedly offers consumers some advantages. However, it is important to understand why. The system reduces corporate churn and ensures that you can continue to pay them your money, no matter what is going on in your financial world. Banks make it easy for you to continue paying these recurring fees. However, stopping them can be much more difficult. If you really want to cancel a subscription, there’s still no substitute for calling the company and canceling.