Comment by paulsutter | Hacker News Reader

Comment by paulsutter | Hacker News Reader

> Tired of your monthly yoga pants subscription? Or a two-week "free" trial that lasted four months? Just deactivate that card number. It's that easy.

This is a pretty useful feature. But does it run afoul of some mysterious rules that allow recurring charges to continue[1], when you have a tradtional card cancelled and reissued under a new number?

From[2]:

> Thanks to some under-the-radar rules that work out in favor of vendors who charge recurring card fees, most credit card carriers allow a "recurring indicator" to be included in vendor/customer credit card transactions. In layman's terms, that means there are data bytes in your credit card payment DNA that allows companies to bypass credit card expiration dates and keep charging you anyway, even if your card has expired.

> Worse, there are loopholes in credit card regulations that enable vendors to get new credit card information if the old card was closed due to fraud, or even if you switched cards for a better rate. In either case, the recurring charges continue.

[1] https://uncrunched.com/2012/08/01/recurring-credit-card-char...

[2] http://www.nasdaq.com/personal-finance/pull-the-plug-on-recu...

You wouldn't expect the lease on your apartment to terminate if you used a credit card for payment and it expired.

Similarly, the lifespan of most other recurring contracts is independent of the lifespan of your credit card. The reality is that most merchants won't chase you for payments when the card expires because it is expensive and generates bad will, but they can.

What I don't understand with Final is how they can guarantee you won't have to make another payment after you cancel a number. They don't control your agreements with third parties.

Edit: though I'm in the UK so my understanding of the law is biased in that direction.

People bring this up on every discussion of virtual card numbers. You should keep in mind that your contract with the vendor is independent of the payment method. Just because you stop paying them, doesn't mean your liability goes away. The vendor could pursue you in court, or could make a black mark on your credit report. Of course, this all depends on the terms of your contract -- if it's with Bally's gym, for example, you can be pretty sure that they will come after you. If it's with some SaaS company, they're more likely to just delete your account.

Unauthorized recurring charges shouldn't hit your real credit card since Final is the credit card issuer in this case, which means they're the ones that ultimately decide if a credit card charge is allowed to go through.

Think of them as a bank that has issued you a new credit card, except they're not actually giving you any credit, just a CC number/PAN.

Stripe handles this nicely. [1] As a merchant, it's handy. As a consumer, it's a bit spooky.

https://stripe.com/blog/smarter-saved-cards

I'm a merchant of semi-high priced recurring memberships ($100-250/mo) and I wish our payment processor had this feature. We routinely have upwards of $4k a month in failed charges for some combination of {expired, cancelled, deleted from the system without the underlying membership being cancelled}.

Curious, what prevents you from switching to stripe? No idea how $4k/month fits in with your revenue or the opportunity costs in doing so, but $4k/month seems enough to justify spending a week to redo the integration.

Most importantly Stripe is quite a bit more expensive the payment processors I've used in the past. Less importantly but still a show stopper is that all the full-featured pieces of management software for this industry (fitness facilities) are tied to a very small number of payment processors. Some of the large ones have one processor and you literally cannot accept credit cards without using them. They're still cheaper than Stripe so it's not that big of a deal but the UX leaves quite a bit to be desired.

As a consumer, is there any way to permanently opt-out of this?

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