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TECHNOLOGY A23
Saturday 17 October 2015
New technology in credit cards leads to headaches
JOSEPH PISANI forced many customers
AP Business Writer
NEW YORK (AP) — Mil- who shopped at the home
lions of Americans are
getting new credit and improvements store to get
debit cards with more se-
cure chiptechnology, and new credit cards.
that’s already leading to
headaches for companies Similarly, IAC/InterAc-
that rely on working cards
to charge their customers tiveCorp, a New York com-
every month.
Video and music stream- pany which owns dating
ing companies, dating
websites, gyms and other websites such as Match.
subscription-based com-
panies can take a hit when com and OkCupid, said
customers don’t update
their accounts after receiv- last year that credit cards
ing a new card. It’s always
been a hassle, but with mil- that were not updated af-
lions of cards carrying the
new chip technology be- ter major security breaches
ing mailed out all at once
it’s creating bigger prob- at Target and Home Depot
lems.
Netflix this week said large cost it about $5 million in
numbers of cards that
weren’t updated were earnings for the year be-
partly to blame for slower
subscriber growth in their fore interest, taxes, depre-
most recent quarter.
The video steaming site ciation and amortization.
said Wednesday that an
unusual number of ac- New cards may contin-
counts were cancelled
during the three months ue to haunt subscription
that ended in September.
Netflix Inc., which has 69 businesses in the coming
million members around
the world, expects the is- months. Most cards in the
sue to continue into the
next quarter as more new U.S. haven’t been switched
chip cards roll out.
With subscription ser- to chip cards yet.
vices gaining in popular-
ity, where customers have “This issue isn’t going
funds automatically with-
drawn from checking ac- This Wednesday, June 10, 2015, file photo, shows a chip-based credit card, in Philadelphia. away anytime soon,” said
counts every month for Associated Press
a service, it has become Schulz.q
increasingly noticeable
when people don’t up- Schulz, a senior analyst at
date the cards that they credit card comparison
use for those services, or site CreditCards.com. Typi-
are unaware that they cally, payments won’t go
need to. through if the expiration
Often, the number on date is different.
the card is still the same, Recurly, a San Francisco
but the expiration date company that manages
has changed, said Matt bill payments for more than
1,900 subscription business-
es, said it has seen a slight
increase in card declines.
Recurly uses a service for its
clients that automatically
updates when new card
numbers are issued, so the
customer doesn’t have to
do it themselves, said CEO
Dan Burkhart, though not
every bank participates in
the service. Burkhart said
subscription companies will
face some “turbulence” as
customers get new cards,
but those issues typically re-
solve within a few months.
The problem has hurt Netf-
lix before.
A year ago, the Los Ga-
tos, California, company
said a number of custom-
er’s accounts were put
on hold due to The Home
Depot data breach, which
