Free Trial Rules: How Does Mastercard’s Policy Compare to Visa’s?

  • Max Jones
  • July 12, 2019
  • 1 Min Read

Both Mastercard® and Visa® have recently launched initiatives to update policies regulating negative option billing and subscriptions with free trials or introductory offers.

The two networks have the same basic goal: encourage merchants to communicate openly and honestly to improve the customer experience.

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While the initiatives are similar, they have several significant differences. Merchants who process both Mastercard and Visa transactions should be aware of how policy expectations differ. 

Check the side-by-side comparison for a high-level overview of the policies. More in-depth explanations can be found in the respective blog articles. 

Merchants ImpactedMerchants with a negative option billing model, the nutra industry being a particular focus Merchants who offer a free trial or introductory offer that turns into an ongoing subscription

Merchants that offer up-sells

Merchants who use negative option billing, with or without a free trial
Items RegulatedPhysical goodsPhysical goods, digital goods, and services
Enforcement DateApril 12, 2019April 18, 2020
MCC Classification5968: Direct Marketing—Continuity / Subscription Merchants5968: Direct Marketing—Continuity / Subscription Merchants

Digital goods or content subscriptions can use MCC 5815, 5816, 5817, or 5818
Billing Descriptor UpdatesInclude the phone number (MO/TO) or URL where the customer shoppedUse the recurring payment indicator for the initial transaction

Include “trial” or a similar phrase for the first post-trial transaction
Relationships with Third-Party Service ProvidersDisclose all service providers with access to cardholder data (for example, CRMs)Not specified
Trial Start DateTrial must start on the day the customer receives the product, not beforeNot specified
Timing of ConsentAfter the trial has ended but before the card is chargedBefore the initial transaction or the trial begins
Information Disclosure Merchant’s name

Date and amount of subsequent transactions

Cancellation instructions

The date the merchant will attempt to charge the card again if the account has insufficient funds when the first attempt is made
Merchant’s name

Date and amount of subsequent transactions

Cancellation instructions

Cancellation policy

Description of the goods or services being offered

Length of the trial period or introductory offer

Clear disclosure that the customer will be charged unless subsequent transactions are cancelled

Date the trial begins or the initial transaction date (if applicable)

Initial transaction amount (if applicable)

Last four digits of the card being used for the subscription

Subscription Confirmation or Transaction ReceiptSent after the trial endsSent immediately after customer consent has been granted
Additional Cardholder Notifications Sent after an approved authorization attempt

Sent after an unsuccessful authorization attempt
Sent seven days before processing the first post-trial transaction

Sent seven days before processing a transaction if the terms of the subscription have changed
Cancellation PolicyPublished on the website the customer shopped at Available online, regardless of how the customer shopped

Include a digital, self-service cancellation option, such as completing an online form or sending a text message
Disclosure of Cancellation Instructions After the trial has ended but before the card is charged

After each subsequent authorization request
Before the initial transaction or the trial begins

Immediately after consent is granted

Before processing the first post-trial transaction

Any time subscription terms are updated
Written Confirmation of Cancellation RequiredNot specified
Trial-Specific Reason CodeNot specifiedIf a transaction is disputed because the customer wasn’t aware of or didn’t agree to a subscription after the trial period, the issuer must use reason code 13.5 - Misrepresentation.
Compliance MonitoringInclusion in the Mastercard Registration ProgramMystery shopping

Want More Information?

Mastercard and Visa have shared very detailed explanations of their new policies. However, compliance is still relatively subjective.

If you have questions about these new free trial rules or want help making necessary changes, don’t hesitate to contact our team of payment experts.

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