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Online Payments: Here's How Streaming Services Make You Pay Forever

Millions of people pay for streaming services, paying monthly subscription fees.

There is a common belief that you can free yourself from recurring online payments by canceling your credit card.

Canceling a credit card won't stop recurring charges, let's see how.

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Estimated reading time: 5 minutes

Attention to innovation

According to Forbes, nearly 46% of Americans have opened a new credit card in 2023, meaning millions of Americans have also canceled old ones. When you switch cards, streaming services don't just stop serving you, they simply start charging your new card. There is a service that allows online payments from subscription services to continue charging you… theoretically without end.

“Banks can automatically update credit or debit card numbers when a new card is issued. This update allows you to continue charging your card, even if it has expired,” Netflix says in its help center.

VAU: Visa Account Updater for Online Payments

You can thank Visa for that. In 2003, Visa USA began offering merchants a new software product called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service for Americans' financial profiles. Every time someone renews, cancels or opens a credit card, banks automatically update the VAU. This system allows recurring online payments to continue charging whatever cards you have on file. It's a seamless transition, allowing recurring online payments to continue moving money to multinationals, without you having to lift a finger.

The success of the VAU service for recurring Online Payments

VAU was an immediate success, quickly adopted by banks and businesses around the world. Visa says its service follows you when you switch between major credit card providers, whether it's Discover, Mastercard, or American Express. Some customers of Visa's tracking service include Netflix, Amazon, Facebook, Google and Disney, according to a 256-page list of those who have adopted the software as of 2022. VAU allows merchants to keep customers tied to their subscription services, but Visa also claims it helps customers.

“Outdated account information on file can lead to declined transactions and inconvenience to cardholders and, in definitive, introduce risks of service cancellation and customer dissatisfaction,” Visa said in marketing materials.

Visa isn't entirely wrong about this. If your electricity or internet bill is tied to your credit card, you could be in for a real problem if you forget to upgrade your new card. However, practices like these can also keep people tied to endless cycles of payments that follow them everywhere.

Origins of the myth

Before services like VAU appeared, changing your credit card was a pretty sure way to get out of recurring charges, whether you wanted it or not.

Practices like this have become increasingly popular in the Internet age. Subscription services have become easier to start, but increasingly difficult to stop. Recurring charges can really follow you everywhere, unless you contact the company directly to stop them.

Because it is pervasive

Visa's Account Updater is really only marketed to businesses, so most consumers have no idea it exists. Most people have no idea that there is a way to turn off Visa credit card tracking service, and even fewer know that it is turned on by default.definita. It's largely a hidden service for the average person, with no clear indicators from your bank. or subscription service that you are tracked in this way.