NEW YORK — Millions of Americans are getting new credit and debit cards with more secure chip technology, and that’s leading to headaches for companies that rely on working cards to charge their customers every month.
Video and music streaming companies, dating websites, gyms and other subscription-based companies can take a hit when customers don’t update their accounts after receiving a new card.
It’s always been a hassle, but with millions of cards carrying the new chip technology being mailed out all at once, it’s creating bigger problems.
Netflix last week said large numbers of cards that weren’t updated were partly to blame for slower subscriber growth in their most recent quarter.
The video-steaming site said Wednesday that an unusual number of accounts were canceled during the three months that ended in September. Netflix, which has 69 million members around the world, expects the issue to continue into the next quarter as more new chip cards roll out.
With subscription services gaining in popularity, where customers have funds automatically withdrawn from checking accounts every month for a service, it has become increasingly noticeable when people don’t update the cards that they use for those services or are unaware that they need to.
Often, the number on the card is still the same, but the expiration date has changed, said Matt Schulz, a senior analyst at credit card comparison site . Typically, payments won’t go through if the expiration date is different.
Recurly, a San Francisco company that manages bill payments for more than 1,900 subscription businesses, said it has seen a slight increase in card declines. — Joseph Pisani, The Associated Press
