The company’s regulations will apply to certain businesses that offer free trials for subscription goods and accept Mastercard, and will require them to obtain explicit cardholder approval in order to begin recurring billing once the free trial has ended. The rules apply to merchants offering free trials for physical products, including health care products, skin care products, and vitamins, which convert to auto-renewing subscriptions or negative option plans. However, digital services such as Netflix or Amazon Prime will not be impacted.
Thus, after obtaining cardholder approval for the first payment after the free trial, Mastercard will require merchants to send the cardholder a message, by email or text, comprising the following details:
Transaction amount,
Payment date,
Merchant name,
Clear instructions on how to cancel.
For each payment, the merchant will need to send a receipt to the cardholder, either by email or text message, with clear instructions on how to cancel. Moreover, all charges that appear on a cardholder’s statement must include the URL of the merchant’s website or the phone number of the location where the cardholder made the purchase. The Mastercard rules will take effect on 12 April 2019, and all applicable merchants, processors, and acquirers are expected to be compliant by that date.
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