What is changing?
Visa is updating its rules related to transactions with merchants that offer free trials or introductory offers as part of an ongoing subscription service.
What does the change mean?
The changes apply to merchants selling both physical and digital goods or services, if they offer free trials or introductory offers that roll into an ongoing subscription/recurring agreement.
How will this affect you?
See below for the requirements. Some are new and some already exist and will be expanded to other regions.
Express consent (existing rule)
At the time of enrollment, merchants must require the cardholder to expressly consent to entering an ongoing subscription service for recurring payments.
The notification requirements which are currently active in the Europe region will be expanded to all regions globally:
Subscription merchants must send an electronic reminder notification (e.g. email or SMS if agreed with the cardholder) and a link to online cancellation at least seven days before initiating a recurring transaction if:
- A trial period, introductory offer or promotional period has expired.
- The nature of the recurring agreement has changed (for example, the price or billing period). Additionally, subscription merchants in Europe must send an electronic copy of the terms and conditions of the subscription service to the cardholder, even if no amount was due at the time.
Explicit transaction receipts
Merchants must disclose the following on transaction receipts when establishing the agreement:
- Length of any trial period, introductory offer or promotional period, including clear disclosure that the cardholder will be charged unless the cardholder takes steps to cancel any subsequent transactions.
- Transaction amount and date for the initial transaction (even if no amount is due) and for subsequent recurring transactions.
- A link or other simple mechanism to enable the cardholder to easily cancel any subsequent transactions online or via SMS.
Merchants must provide an easy way to cancel the subscription or payment method online, regardless of how the cardholder initially interacted with the merchant.
An additional descriptor indicating a trial period-related transaction will be required in the “Merchant Name” field (1st line descriptor) for the first financial transaction at the end of the trial period. This descriptor (e.g. “trial,” “trial period,” “free trial”) will then appear on cardholder statements and SMS alerts. Additionally, the “initial recurring” payment indicator will be required to be populated for the first transaction, even if the amount is not equal to the ongoing obligation.
April 18, 2020