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Payments/Recurring payments/Recurring payments and Negative Option Billing on MasterCard cards

New MasterCard Rules

MasterCard requests changes to the payment pages, receipts and emails of merchants that offer recurring payments and/or whose services include the offer of a trial period followed by the implicit opt-out subscription, which means an automatic acceptance unless explicitly refused, i.e. the so-called Negative Option Billing Model.

The deadlines established by MasterCard for the implementation of modifications are:

  • March 22, 2022: all changes relating to the subscription and payments notifications;

  • September 22, 2022: all changes to the payment pages;

Subscription and payments notifications changes

By March 22, 2021 merchants that use recurring payments and/or offer services with the Negative Option Billing Model must:

  • send a confirmation notification via e-mail or another digital channel immediately after subscription that contains:

    • plan’s payment terms and deadlines, including the frequency and amount of the recurring payment;

    • the duration, terms and conditions of the free trial period, as well as the value of the first payment, if there is one. All must be listed if a Negative Option Billing Model is chosen or if there is a free trial period;

    • instructions on how to unsubscribe;

  • send a payment receipt by e-mail or via another digital channel after each transaction is made, the notification must contain the cancellation policies. If the transaction wasn’t successful, the email must contain the reason for the decline. If multiple tries are performed in a 24-hour period, only a single receipt can be sent containing all information on payment attempts;

  • send a notification via e-mail or another digital channel that is clearly distinguishable from a marketing communication, in case of the subscription with a payment frequency of no less than 6 months and not earlier than 7 days before payment, and the notifications must contain:

    • Plan terms;

    • Cancellation policies;

    • Clear specification in the subject that it is related to the upcoming recurring payment;

  • send a notification via e-mail or another digital channel, in the case of Negative Option Billing Model, with the subject that mentions digital services and products, not less than 3 days and not more than 7 days before the expiry of the free trial or the conditions change, and the notification must contain:

    • Notice of the upcoming free trial expiration;

    • Payment terms and deadlines of the plan;

    • Instructions on how to unsubscribe;

  • request to show the client the date when the subscription period for the Negative Option Billing Model with the subject of physical products, will start, in addition to the explicit consent of the cardholder regarding the plan information after the end of the trial period;

  • send a confirmation notification by e-mail, another electronic channel or on paper, at least 7 days in advance of the plan modification, if the terms of the subscription changed;

  • send a confirmation notification by e-mail, another electronic channel or on paper, within 7 days of cancellation, if a request for cancellation was made by the customer.

Change of payment pages

The payment pages are all the pages where the order report is present or where the buyer enters the card credentials.

Merchants who fall into the categories described in the introduction must:

  • include subscription payment terms and deadlines together with the request for card credentials, including the frequency and amount of the recurring payment;

  • for the Negative Option Billing Model, include the free trial terms and conditions, such as the initial payment, the length of the trial period, the price and payment frequency of the subscription;

  • include a check that explicitly requires approval of the terms set out in the offer;

  • include cancellation policies online or via other electronic channels, for example by inserting a direct link to cancel the subscription on the same website where the cardholder accepted the conditions.

If a dedicated page is used, the requirements are not met, if there is a need to scroll down the or expand a text box to view the conditions.

New plan features for Negative Option Billing Models

As regards the subscription plans, the only change specified by MasterCard concerns the start date of the plan: the start date of the free trial must correspond with the date, when the cardholder receives the physical or digital product.

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