Hot off the presses . . . a client just forwarded me the attached announcement from Mastercard regarding revising its “new” rules for subscription/recurring charge programs. Most importantly, the requirement to send a transaction receipt with cancel instructions following each successful payment authorization is now just “recommended.” THIS IS HUGE! The following is a summary of the revisions, all effective October 11:
- Not-for-Profits/Charities. All of the new rules for recurring charge programs are no longer requirements for not-for-profits and charities (for membership and donations), but rather only “best practice recommendations.” However, these recommendations will become mandatory for any party in Mastercard’s Acquirer Chargeback Monitoring Program or are otherwise identified as a high chargeback Merchant for a period of four or more months.
- Order Acknowledgement/Confirmation. For all merchants, order acknowledgement/confirmation notices must still be sent, but do not need to include explicit instructions on how to cancel the subscription, but rather now only require the message to “include or provide access to instructions for account management capabilities, including instructions for cancelling the subscription.” NOTE: This is a major departure from the original requirement, which required explicit instructions on how to cancel.
- Transaction Receipts. Also for all merchants, Mastercard has eliminated its requirement to send a transaction receipt (including cancel instructions) following each charge, now only “recommending” that such notices be sent, and in such case, including the amount and reason for the billing, and either access to or instructions for account management capabilities (same as order acknowledgment/confirmation). Again, this is HUGE! However, this “recommendation” will be mandatory for Merchants that are in Mastercard’s Acquirer Chargeback Monitoring Program or are otherwise identified as a high chargeback Merchant for a period of four or more months. As a side note, Mastercard memorialized its prior “advice” that subscribers may opt out of future transaction receipt notices.
- Renewal Notices. For recurring billing programs that charge less frequently than every six months (i.e., six month, annual or bi-annual billing), like the order confirmation and transaction receipt revisions above, the renewal notice need not include instructions on how to cancel, but rather only a link or information for account management.
Obviously, this is great news for Merchants struggling to comply with Mastercard’s new rules regarding notices to subscribers.
Review the Mastercard Revised Standard for Merchants Utilizing a Subscription/Recurring Payments Model or Negative Option Billing Model below, or download it for future reference.