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Visa Updates its Rules on Subscription Plans

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Miranda Russell | April 14, 2020

“In an effort to ensure transparency and communication between businesses and customers, Visa is updating its card brand rules for payments associated with subsc”
2 min read

    If you currently offer subscription plans that include a free trial to your customers, you will want to familiarize yourself with Visa's upcoming changes for subscription plans.

    In an effort to ensure transparency and communication between businesses and customers, Visa is updating its card brand rules for payments associated with subscription plans that include free trials or introductory offers. Effective April 18, 2020, businesses will need to ensure that:

    • A reminder notification is sent to cardholders seven days before they are charged for a subscription service
    • The reminder notification includes a link to the online cancellation policy making it easy for the customer to cancel the service
    • Customers can not be auto-enrolled into a subscription service after their free trial period is up without their consent

    Similar notifications will also need to be sent if there are any changes to the subscription plan after the customer has signed up. For example, if the price of the subscription or the billing period is changing, these changes will need to be clearly communicated. In addition to these changes, Visa requires that you provide clear details of the recurring plan including all of the terms and conditions at the time of sign up, even if no payment is due at that time.

    If any of your recurring plans or subscriptions currently auto-enroll customers after a free trial period, you will want to review your plan options to ensure you are adhering to Visa's updated requirements. Clearly communicating with customers and making it easy for them to cancel subscription plans they no longer want to be subscribed to can help to prevent chargebacks or customer confusion around charges on their credit card statements.

    Part of the updated Visa rules also includes an update to the misrepresentation dispute condition. The misrepresentation dispute condition includes transactions where products or services were purchased through a trial period or as a one-off purchase where the cardholder was not clearly advised of further billing after the purchase date.

    If your business receives a chargeback due to misrepresentation, you are able to respond to the dispute by providing proof that the customer has clearly been notified of and agreed to future transactions during the initial interaction and that you have sent an email to the customer before you processed new transactions after the trial period was completed.

    If you'd like to view more details related to Visa's trial subscription updates you can view the notice here. Familiarizing yourself with the updates and ensuring your subscription plans follow the new rules will help you continue to deliver a great customer experience and give you the tools needed to protect your business in the event of a chargeback.

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