New Visa Rules for Subscriptions
New Visa Rules for Trial and Promotional Subscriptions

Title: New Visa Rules for Trial and Promotional Subscriptions
Publish Date: 2020-04-21
Author: Art DeVaughn

If you accept Visa as a form of payment for Subscriptions (Trial and/or Promotional) new rules went into affect April 18, 2020. Based on past behavior from credit card providers we suspect that all credit card providers will follow suit.

We've put together this guide to help you navigate these new policies and get compliant.

Why are the rules changing?

Subscription offers can sometimes be confusing to customers especially if they involve free trials or promotions. Due to customer confusion regarding when trials begin/end, when billing begins/ends, and how to stop billing, Visa has updated their policies to help consumers be less confused and provide transparency, control and choice. They are hoping to help merchants provide an enhanced customer experience and reduce charge backs and disputes.

What type of subscriptions is Visa talking about?

The new rules apply to physical and digital goods or services that are offered as a Free Trial or a Promotion (discounted or introductory) within a recurring billing subscription.

What are the new rules/policies?

The rules we have outlined below are directly from VISA. You can also download a copy from us Here.

Rule #1 - Express Consent

At the time of enrollment, merchants must require the cardholder to expressly consent to entering an ongoing subscription service for recurring payments.

Rule #2 - Explicit Transaction Receipts

Merchants must disclose the following on transaction receipts:

  • 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 onlin

Rule #3 - Easier Cancellation

Merchants must provide an easy way to cancel the subscription or payment method online, regardless of how the cardholder initially interacted with the merchant.

Rule #4 - Enhanced Notification

At the time of enrollment, merchants must provide a copy (i.e., email or SMS/text, or other delivery method, if agreed with the cardholder) of the terms and conditions of the subscription service to the cardholder, even if no amount was due at the time. This must include:

  • Confirmation that the cardholder has agreed to a subscription, unless the cardholder cancels.
  • The start date of the subscription.
  • Details of the goods/services.
  • Ongoing transaction amount and billing frequency/date.
  • Link or other simple mechanism to enable the cardholder to easily cancel any subsequent transactions online.

Merchants must also send a reminder notification (i.e., email or SMS/text) including a link to online cancellation policy at least seven (7) days before initiating a recurring transaction if:

  • A trial period, introductory offer, or promotional period is about to expire.
  • The nature of the recurring agreement has changed.

Rule #5 - Enhanced Statement Descriptor

An additional descriptor indicating a trial period-related transaction will be required in the Merchant Name field of the Clearing Record for the first transaction at the end of a trial period.

This descriptor (for example, "trial," "trial period," "free trial") will then appear on cardholder statements, online banking, mobile apps, and SMS/text alerts, in the same way discretionary, additional invoice/order numbers appear for electronic commerce transactions.


Rule #6 - Expanded Dispute Rights

The existing dispute condition of "Misrepresentation" will be expanded, specifically for transactions where merchandise or digital goods have been purchased (a) through a trial period or (b) as a one-off purchase, and the cardholder was not clearly advised of further billing after the purchase date.

Merchants can remedy the dispute by proving that they have acted appropriately, provided they can show:

  • The cardholder expressly agreed to future transactions at the time of the initial interaction; and
  • The merchant electronically notified the cardholder (based on the details the cardholder provided) before processing new transactions following the trial/ promotional period.

How can Subscriptions Only help me?

If you currently use Subscriptions Only there is nothing you need to do, we're compliant which allows you to be compliant.

If you're not using Subscriptions Only as your billing provider and have an SaaS solution from a competitor, contact them and ask them about their compliance to the New Visa Rules for Trial & Promotional Subscriptions.

If you already have a custom solution that's NOT part of an SaaS, we can help. Give is a call at 865-458-4443.

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