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Alternate headline: Stripe helps Postmates screw their customers out of $70 million > "By intelligently updating the credentials on saved cards that have expir

Alternate headline: Stripe helps Postmates screw their customers out of $70 million > "By intelligently updating the credentials on saved cards that have expired or been replaced, CAU optimizes authorization rates to keep subscription payments recurring seamlessly." This is the shady practice of charging people's new credit card when their old one expires or they replace it to get rid of their subscription accounts. People assume they'll rid themselves of their accounts on things like Postmates, but thanks to this shady shit they keep getting milked. In many cases they might not notice for a while and/or not be able to get a refund. This should be completely illegal. It's extremely unethical. Customers should have to consent to sharing a new credit card with a service that they've only shared a previous one with. This "innovation" is rich people at rich companies figuring out how to screw people, many of them poor. The other stuff is probably shady too, but $60 million of the $70 million came from this implementing this practice alone. It's safe to assume that Stripe and Postmates set a large number of people back financially, some undoubtedly went hungry, some had trouble paying their bills. And Stripe does this for many other companies presumably. As someone clearly smart and good enough to see the ethics of this practice, Patrick Collision should be ashamed of himself. Instead, they're bragging about it.

avipars 6y ago
If they didn't have a clickbait title, the post wouldn't be as interesting
mc10 6y ago
> This is the shady practice of charging people's new credit card when their old one expires Is this really shady? I’d personally find this behavior super convenient.
- snug 6y ago
  Seems a bit shady if say I use a refillable gift card for certain services that are hard to cancel
  - noirbot 6y ago
    That seems like it's not this situation though? It's not like they're going to refill the gift card for you or somehow guess the new card number.
- staunch 6y ago
  Imagine being a poor person that gets a replacement credit card expecting to ditch your subscriptions, to get your finances in order, and then getting billed anyway on your new card.
  - rsstack 6y ago
    This "life hack", just like doing chargebacks to your gym because it's easier than calling them, isn't valid. Your complaint is an extreme example of https://www.xkcd.com/1172/ https://www.xkcd.com/1172/
    - jawns 6y ago
      The way you describe it, switching to a new credit card is a slightly easier way to get rid of a recurring charge than going through the proper channels and calling to cancel a subscription, and people who do so are just being lazy. But in reality, many companies make it nearly impossible to cancel a subscription, even when the customer has the right to do so. I have experienced cases where the only way to cancel is to call a designated phone number, but you're put on indefinite hold by the phone system and can never actually get through to the person who can cancel. Or you need to fax a cancellation request, and somehow the system never actually processes it, despite repeated attempts. So, in these cases, cancelling an old card is an act of desperation, not an act of laziness.
      - rsstack 6y ago
        It was a loophole that happened to work but that's not one of the design objectives of the credit card system. It isn't Postmates', or Stripe's, or Visa's fault that some companies refuse to let you cancel (ahm... Shipt...). They don't need to make the card replacement process _worst_ for everyone just because of those few bad companies, when they have a different process for dealing with non-cancelling subscriptions (dispute with your bank and show you attempted to cancel - ahm... Shipt...).
        staunch 6y ago
tonystubblebine 6y ago
In one way, this is exactly the comment I came here to read. The article made my eyes glaze over it was so press-release-y and so I wanted to know what the actual plain language detail is. You delivered that, thank you. However, in the specific case of Postmates, have they actually used this feature to screw people over? I get what you are saying in the case of a subscription like Netflix. But with Postmates, the user is making a concrete in-the-moment decision to spend money. This actually feels like a minor convenience in that the customer is hungry and can get the order in without having to fish out their credit card details again.
- gcmac 6y ago
  Not sure how heavily used it is, but FWIW Postmates does offer a $10/month subscription service for reduced fees/free delivery like most other food delivery services do
- nrmitchi 6y ago
  In the specific case of Postmates listed in the linked article, > By intelligently updating the credentials on saved cards that have expired or been replaced, CAU optimizes authorization rates to keep subscription payments recurring seamlessly. So either Stripe is referring to a feature that Postmates didn't directly use (unlikely), or they are referring to Postmates Unlimited subscriptions, which is $10/month (and not an in-the-moment decision)
  - tonystubblebine 6y ago
    Got it. Thanks.
- eshyong 6y ago
  I think the issue isn't that they're spending money on an order in the moment, it's an auto-renewing subscription that users may not even remember about.
HaloZero 6y ago
Isn't replacing a card usually triggered b/c your card was lost or stolen? As a consumer it seems that I would want to keep my subscriptions ongoing if that happens vs having to type in my cards in all my services again. I've rarely heard of people replacing a card b/c they want to cancel all their subscriptions.
- millzlane 6y ago
  I've honestly come to like when services remind me that they couldn't charge my card. It reminds me of the services that I don't use still taking money.
- somethingwitty1 6y ago
  Cards expire. I don't have data on which is the most common, but based on my personal experience, the majority of my replacement cards are from expiration, not from being lost or stolen. When my cards are lost/stolen, they provide a whole new card number. To my knowledge, they are not eligible for these auto-update programs.
sinsterizme 6y ago
You're just looking to complain here. It's super convenient and I would argue less surprising that an updated credit-card retains the subscriptions that were on my expired card. It's not going to follow you if you completely replace the credit-card https://stripe.com/blog/smarter-saved-cards https://stripe.com/blog/smarter-saved-cards
- staunch 6y ago
  Wrong. I'm speaking from the personal experience of knowing poor people who have been hurt by this practice. There's no reason this couldn't have been implemented by asking customers for consent. Consent isn't asked because it's not likely to be granted in many cases and they fucking know it.
  - nrmitchi 6y ago
    Exactly. If Postmates (or Stripe, they can pass this logic through if they really wanted to) already knows (or thinks it knows) your new card details, it could just as easily be an in-app pop-up or push notification of "We've detected that your card you use on Postmates has been replaced. Would you like to update your account to the card ending in XXXX?" Extremely little use friction, it's a single button press, but it actually informs the user or what is happening. It would be really interesting to me to see the stats on how many users who have had their cards automatically updated actually make a purchase afterwards, and how many are zombies.
  - edwinwee 6y ago
    If a cardholder cancels their account and gets a new one, that card number won’t be shared and updated with Stripe’s Card Account Updater. We work directly with each card issuer to update the number if the physical card is lost, stolen, or got renewed. The most common use case I’ve seen: a customer losing their wallet and then getting a replacement card. But when checking out on a site where they saved their card, they don’t have to re-enter their new number. This is why we call it Card Account Updater.
    - staunch 6y ago
toomuchtodo 6y ago
Thanks for bringing this issue up. I've added the concern to my list of items to cover with policymakers I interact with. This behavior should be better regulated by financial regulation and governed by the CFPB, similar to what currently applies to direct debits [1]. User consent should absolutely be required for such changes to financial obligations by way of charge subscriptions. [1] https://www.consumerfinance.gov/about-us/blog/you-have-protections-when-it-comes-to-automatic-debit-payments-from-your-account/ https://www.consumerfinance.gov/about-us/blog/you-have-prote...
noirbot 6y ago
The crux of the question is, I guess, if a renewed credit card (with a new expiration date) is a "new credit card". Presumably this feature wouldn't work if you changed your card to one with a different CC number because it's a new account. If I lose/damage my card and have to get a new physical card, I at least don't think of that as a "new" card in terms of billing. It's not a new account with the card company in a contractual sense. I understand the issues with some companies making it really hard to cancel a subscription, and I agree that there should be more regulation around being able to unsubscribe easily, but in the abstract, a subscription is a contract to pay X a month for Y service until you give the vendor notice of cancellation under some terms. If anything "canceling" by intentionally voiding your payment information in this way is a hack of the system, and a little unethical, even if it's expedient. I would guess that, in the majority case, people's subscriptions lapsing due to their card expiring isn't intentional. I know I've certainly had to re-subscribe to a lot of things before, due to my card having to be replaced because of fraudulent activity, and if it could have just automatically incremented my expiration date by a couple months, that would have saved me hours of work.
LordAtlas 6y ago
Wait, this kind of thing is legal in USA?
- viklove 6y ago
  Where is it illegal? Can you point me to the law that makes it so? Curious to see the wording of how they identify and enforce something like that.

avipars 6y ago

If they didn't have a clickbait title, the post wouldn't be as interesting

mc10 6y ago

> This is the shady practice of charging people's new credit card when their old one expires Is this really shady? I’d personally find this behavior super convenient.

snug 6y ago
Seems a bit shady if say I use a refillable gift card for certain services that are hard to cancel
- noirbot 6y ago
  That seems like it's not this situation though? It's not like they're going to refill the gift card for you or somehow guess the new card number.
staunch 6y ago
Imagine being a poor person that gets a replacement credit card expecting to ditch your subscriptions, to get your finances in order, and then getting billed anyway on your new card.
- rsstack 6y ago
  This "life hack", just like doing chargebacks to your gym because it's easier than calling them, isn't valid. Your complaint is an extreme example of https://www.xkcd.com/1172/ https://www.xkcd.com/1172/
  - jawns 6y ago
    The way you describe it, switching to a new credit card is a slightly easier way to get rid of a recurring charge than going through the proper channels and calling to cancel a subscription, and people who do so are just being lazy. But in reality, many companies make it nearly impossible to cancel a subscription, even when the customer has the right to do so. I have experienced cases where the only way to cancel is to call a designated phone number, but you're put on indefinite hold by the phone system and can never actually get through to the person who can cancel. Or you need to fax a cancellation request, and somehow the system never actually processes it, despite repeated attempts. So, in these cases, cancelling an old card is an act of desperation, not an act of laziness.
    - rsstack 6y ago
      It was a loophole that happened to work but that's not one of the design objectives of the credit card system. It isn't Postmates', or Stripe's, or Visa's fault that some companies refuse to let you cancel (ahm... Shipt...). They don't need to make the card replacement process _worst_ for everyone just because of those few bad companies, when they have a different process for dealing with non-cancelling subscriptions (dispute with your bank and show you attempted to cancel - ahm... Shipt...).
      - staunch 6y ago

tonystubblebine 6y ago

In one way, this is exactly the comment I came here to read. The article made my eyes glaze over it was so press-release-y and so I wanted to know what the actual plain language detail is. You delivered that, thank you. However, in the specific case of Postmates, have they actually used this feature to screw people over? I get what you are saying in the case of a subscription like Netflix. But with Postmates, the user is making a concrete in-the-moment decision to spend money. This actually feels like a minor convenience in that the customer is hungry and can get the order in without having to fish out their credit card details again.

gcmac 6y ago
Not sure how heavily used it is, but FWIW Postmates does offer a $10/month subscription service for reduced fees/free delivery like most other food delivery services do
nrmitchi 6y ago
In the specific case of Postmates listed in the linked article, > By intelligently updating the credentials on saved cards that have expired or been replaced, CAU optimizes authorization rates to keep subscription payments recurring seamlessly. So either Stripe is referring to a feature that Postmates didn't directly use (unlikely), or they are referring to Postmates Unlimited subscriptions, which is $10/month (and not an in-the-moment decision)
- tonystubblebine 6y ago
  Got it. Thanks.
eshyong 6y ago
I think the issue isn't that they're spending money on an order in the moment, it's an auto-renewing subscription that users may not even remember about.

HaloZero 6y ago

Isn't replacing a card usually triggered b/c your card was lost or stolen? As a consumer it seems that I would want to keep my subscriptions ongoing if that happens vs having to type in my cards in all my services again. I've rarely heard of people replacing a card b/c they want to cancel all their subscriptions.

millzlane 6y ago
I've honestly come to like when services remind me that they couldn't charge my card. It reminds me of the services that I don't use still taking money.
somethingwitty1 6y ago
Cards expire. I don't have data on which is the most common, but based on my personal experience, the majority of my replacement cards are from expiration, not from being lost or stolen. When my cards are lost/stolen, they provide a whole new card number. To my knowledge, they are not eligible for these auto-update programs.

sinsterizme 6y ago

You're just looking to complain here. It's super convenient and I would argue less surprising that an updated credit-card retains the subscriptions that were on my expired card. It's not going to follow you if you completely replace the credit-card https://stripe.com/blog/smarter-saved-cards https://stripe.com/blog/smarter-saved-cards

staunch 6y ago
Wrong. I'm speaking from the personal experience of knowing poor people who have been hurt by this practice. There's no reason this couldn't have been implemented by asking customers for consent. Consent isn't asked because it's not likely to be granted in many cases and they fucking know it.
- nrmitchi 6y ago
  Exactly. If Postmates (or Stripe, they can pass this logic through if they really wanted to) already knows (or thinks it knows) your new card details, it could just as easily be an in-app pop-up or push notification of "We've detected that your card you use on Postmates has been replaced. Would you like to update your account to the card ending in XXXX?" Extremely little use friction, it's a single button press, but it actually informs the user or what is happening. It would be really interesting to me to see the stats on how many users who have had their cards automatically updated actually make a purchase afterwards, and how many are zombies.
- edwinwee 6y ago
  If a cardholder cancels their account and gets a new one, that card number won’t be shared and updated with Stripe’s Card Account Updater. We work directly with each card issuer to update the number if the physical card is lost, stolen, or got renewed. The most common use case I’ve seen: a customer losing their wallet and then getting a replacement card. But when checking out on a site where they saved their card, they don’t have to re-enter their new number. This is why we call it Card Account Updater.
  - staunch 6y ago

toomuchtodo 6y ago

Thanks for bringing this issue up. I've added the concern to my list of items to cover with policymakers I interact with. This behavior should be better regulated by financial regulation and governed by the CFPB, similar to what currently applies to direct debits [1]. User consent should absolutely be required for such changes to financial obligations by way of charge subscriptions. [1] https://www.consumerfinance.gov/about-us/blog/you-have-protections-when-it-comes-to-automatic-debit-payments-from-your-account/ https://www.consumerfinance.gov/about-us/blog/you-have-prote...

noirbot 6y ago

The crux of the question is, I guess, if a renewed credit card (with a new expiration date) is a "new credit card". Presumably this feature wouldn't work if you changed your card to one with a different CC number because it's a new account. If I lose/damage my card and have to get a new physical card, I at least don't think of that as a "new" card in terms of billing. It's not a new account with the card company in a contractual sense. I understand the issues with some companies making it really hard to cancel a subscription, and I agree that there should be more regulation around being able to unsubscribe easily, but in the abstract, a subscription is a contract to pay X a month for Y service until you give the vendor notice of cancellation under some terms. If anything "canceling" by intentionally voiding your payment information in this way is a hack of the system, and a little unethical, even if it's expedient. I would guess that, in the majority case, people's subscriptions lapsing due to their card expiring isn't intentional. I know I've certainly had to re-subscribe to a lot of things before, due to my card having to be replaced because of fraudulent activity, and if it could have just automatically incremented my expiration date by a couple months, that would have saved me hours of work.

LordAtlas 6y ago

Wait, this kind of thing is legal in USA?

viklove 6y ago
Where is it illegal? Can you point me to the law that makes it so? Curious to see the wording of how they identify and enforce something like that.