LOS ANGELES — NETbilling is offering guidance on VISA's revised rules applying to merchants offering free or introductory trials that roll into recurring subscription fees.
"VISA has defined these new requirements aiming to avoid cardholder complaints and confusion, as well as tracking and monitoring difficulties," explained a NETbilling rep.
A chronological summary of requirements are listed below:
Effective April 18, 2020: At the time of enrollment, merchants must require the cardholder to expressly consent to entering an ongoing subscription service for recurring payments. This consent should be separate from the cardholder’s consent with any other general terms and conditions.
Effective April 18, 2020: An electronic reminder notification and a link to online cancellation at least seven days before initiating a recurring transaction should be sent to the cardholder if: a trial period, introductory offer or promotional period has expired; or the nature of the recurring agreement has changed.
This communication should include:
- An electronic copy of the terms and conditions of the subscription service
- Confirmation that the cardholder has agreed to a subscription, unless the cardholder cancels
- The start date of the subscription
- Details of the goods or services
- Ongoing transaction amount
- Billing frequency or date
- Link or other simple mechanism to enable the cardholder to easily cancel any subsequent transactions online
If the trial, introductory offer or promotional period is seven days or less, the initial confirmation provided to the cardholder should include the details required in the reminder as stated above.
Effective April 18, 2020: Merchants must disclose the following on transaction receipts upon establishment of the agreement: length of any trial period, introductory offer or promotional period, including clear disclosure that the cardholder will be charged unless the cardholder cancels any subsequent transactions; transaction amount and date for the initial transaction (even if no amount is due) and for subsequent recurring transactions; link or other simple mechanism to enable the cardholder to easily cancel any subsequent transactions online.
Effective April 18, 2020: Merchants must provide an easy way to cancel the subscription or payment method online, regardless of how the cardholder initially interacted with the merchant. For the ease of cancellation, VISA provides as an example the unsubscribing from an email distribution list.
Effective April 17, 2021 (originally slated for April 18, has been delayed until 2021): An additional descriptor indicating a trial period-related transaction will be required in the Merchant Name field for the first transaction at the end of the trial period (i.e., the first transaction after the trial period has expired). For this additional descriptor, VISA provides as an example “trial”, “trial period” or “free trial.”
NETbilling is developing system changes to support these requirements within its payment gateway.
Contact support@netbilling.com for additional details.