Subscriptions, trial periods, and unscheduled transactions
Last updated: March 8, 2023
The card networks have set disclosure requirements for when cardholders are offered subscriptions, free trial periods, or are authorized for unscheduled payments with stored card details.
The aim of these requirements is to promote an enhanced and transparent customer experience. If you offer subscriptions or process unscheduled payments, you will need to comply with these requirements.
Disclosure requirements for subscriptions
The cardholder must expressly consent to sign up for the subscription and payment.
When signing up for the subscription, cardholders must receive terms and conditions which must include:
- the start date
- the details of goods or services
- the transaction amount
- the billing frequency and date
- a mechanism to cancel
In the European Economic Area (EEA) region, you must provide this notification within two business days of setting up the agreement.
3. Reminder notification
For trial periods, cardholder must be notified at least seven days before a trial or introductory offer will end, and be given the option to cancel.
For subscriptions where the billing frequency is every six months or more, cardholders must receive a reminder at least seven days prior to the next billing date. The reminder must include the subscription terms, and clear instructions on how to cancel.
4. Transaction receipts or confirmation
Cardholders must receive a receipt or confirmation stating the transaction amount, transaction date, and instructions on how to cancel after each successful authorisation.
If a trial period, confirmation must include length of trial/introductory offer and clearly state that, following the trial, the cardholder will be charged unless subscription is canceled.
5. Statement descriptor
A descriptor indicating the end of a trial period is recommended in the Merchant Name field for the first financial transaction. For example, 'end trial'. Learn more about dynamic descriptors.
Cardholders must have an easy way to cancel a subscription, and you must disclose this when they sign up for the subscription.
Disclosure requirements for unscheduled transactions
Unscheduled transactions are transactions that use a stored credential for a fixed or variable amount that does not occur on a scheduled or regularly occurring transaction date. For example, where the consumer consented for the merchant to initiate one or more future transactions.
The cardholder must:
- expressly consent to sign up for unscheduled transactions to be taken from their account
- agree to the storing of their card details for this purpose
When signing up to store their card details on file, cardholders must receive terms and conditions. These must include how the card details will be used (for example, an automatic top up for a mobile phone when it falls below a minimum amount).
In the EEA region, you must provide notification to the cardholder of any change to the transaction amount or any other terms of the agreement at least two working days before the change.
3. Transaction receipts or confirmation
After each successful authorization, cardholders must receive a receipt or confirmation stating the transaction amount and transaction date.
4. Statement descriptor
For the first financial transaction, a descriptor indicating the end of a trial period is recommended in the Merchant Name field. For example, 'mobile balance top up'. Learn more about dynamic descriptors.
Cardholders must have an easy way to cancel an agreement to take unscheduled charges from their account. You must disclose this when they sign up for the agreement.
EU disclosure requirements for subscriptions and transactions
In addition to the general requirements for subscriptions and unscheduled transactions, merchants in Europe must also meet specific requirements.
From April 15, 2023, you must display information to cardholders in both of these places:
- the webpage where payment credentials are requested and entered
- the checkout screen
This reflects EU regulation on consumer rights and complaints.
Display the following to cardholders:
- your name as the merchant
- the amount of the transaction (even if it is zero), and the amount and timing of any recurring transactions that will occur
- the length of any trial period, introductory offer, or promotional period
- how the cardholder will be charged (including showing the last four digits of the card)
- how to cancel the agreement and/or any subsequent recurring transactions
Additionally, you must:
- provide subscription notification within two working days of setting up the agreement
- for unscheduled payments, notify the cardholder of any change to the transaction amount, or any other terms of the agreement, at least two working days before the change