Merchant rules for recurring and subscription payments

While storing card credentials for a subscription:

Disclose the subscription terms simultaneously with the request for Card credentials including

• a description of the service or goods,
• the price and frequency of billing,
• the cancellation and refund policy,
• the location of the merchant outlet and
• address, email address, and phone number to contact the merchant in relation to the transactions

These subscription terms must be clearly and prominently displayed on the payment page.

It is necessary to obtain assent of the terms from the cardholder.

In addition, for negative option billing models: disclose the terms of the trial, including any initial charges, the length of the trial period, and the price and frequency of the subsequent subscription.

When the cardholder has completed the subscription:

Promptly send a subscription order confirmation to the Cardholder through an email message or other electronic communication method that includes:

• the subscription terms and
• clear instructions on how to cancel the subscription.

During the terms of the subscription model:

When a transaction is authorised, provide the Cardholder with a Transaction receipt through an email message or other electronic communication method that includes instructions for cancelling the subscription.

Provide an online or electronic cancellation method (similar to unsubscribing from email messages or any other electronic method) or clear instructions on how to cancel that are easily accessible online.

When frequency is less than 180 days, then at least seven but no more than 30 days prior to the next billing date, do send a reminder to the cardholder through an email message or other electronic communication method that includes:

the subscription terms,

• clear instructions on how to cancel the subscription and
• a clear reference in the subject line that it relates to upcoming charges to the Cardholder

In addition, for negative option models for digital goods and services offering a trial period longer than seven days:

No less than three days and no more than seven days prior to end of trial period, the Merchant must send a reminder notification to the Cardholder that the subscription plan will commence if the Cardholder does not cancel, or whenever terms and conditions will change. This notification must include the basic terms of the subscription and clear instructions on how to cancel.

In addition, for negative option models for physical goods:

After the trial period has expired, the Merchant must provide the following information to the Cardholder:

• The date the subscription period begins,
• The Transaction amount,
• The payment date of the Transaction,
• The Merchant name as it will appear on the Cardholder’s statement and
• Instructions for terminating the recurring payment Transaction cycle

Before submitting an initial recurring payment Transaction receive the Cardholder’s explicit consent.

More information:

Detailed rules can be found in Mastercard’s chapters 5.4.1 and 5.4.2 of the Transaction Processing Rules