Visa Trial Subscription Updates—What You Need to Know
From April 18, 2020, Visa will update its rules regarding subscriptions. The new conditions will introduce greater transparency and control for customers. Here’s what you need to know about the new rules.
Learn the recommendations carefully and apply all requirements to your systems to stay compliant with the Visa updates before they come into effect. Continue reading to find out what you have to do to meet the requirements.
What’s new for merchants?
The new rules apply to merchants who sell both physical and digital goods and services and offer trial subscriptions.
Visa’s document provides several obligations for merchants that require them to deliver specific information to cardholders. Here’s what you need to prepare for:
- Confirmation that cardholders agreed to enter into the subscription
- Subscription start date
- Details of goods and services
- Transaction amount and billing frequency/date
- Link or a similar simple mechanism to cancel the subscription online.
Moreover, you must notify cardholders at least 7 days before initiating a recurring transaction if a trial period expires or there are changes to the subscription (e.g. price or billing period).
- Length of trial or promotional period and details
- Date and amount of the transaction even if the initial transaction comes with no amount
- Link or any other simple mechanism to cancel the subscription online.
- A proof that the cardholder expressly agreed to future transactions
- Evidence that you electronically notified the cardholder before processing new transactions.
How will customers benefit from Visa trial subscription updates?
Visa updates are designed for greater transparency, hence might help customers to understand how free trials work and that they are going to be charged for next purchases. Besides the transparency, Visa points out four main benefits for cardholders:
All the changes are designed to enhance customer experience so that customers can be more comfortable when they initiate subscription payments on websites that offer trials, as according to Visa, such transactions cause problems for all parties involved.
What are the reasons for the changes?
The main reason is keeping cardholders more aware of their recurring purchases. With greater transparency and better user experience also comes a lower chance of chargebacks.
New rules will make recurring transactions easier to identify and recognizable by both cardholders and issuers. So the update enables both sides to take action on subscription transactions, which might result in fewer disputes.
To sum up, if you provide a free trial or introductory offers that turn into an ongoing subscription service, adjust the updates to your payment system. Visa will actively monitor whether merchants follow the rules effective from 18 April 2020.
We highly recommend making any appropriate updates to your systems and procedures to make sure that you have all mandatory changes in place before Visa’s implementation timeline.
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