Recurring Payments Guidelines

Learn how to stay in compliance with Recurring Payments and Subscriptions.

Subscriptions allow you to charge a fixed amount to a payment instrument on a recurring time period. You can use Subscriptions to charge buyers, customers, or even merchants.

1. General Disclaimer

Important: There are federal, state, card network, and NACHA requirements that govern a merchant's use of recurring, subscription, negative option, and automatic renewal payment plans (collectively, "automatic renewal requirements"). These requirements impose obligations on merchants to disclose the key terms of any automatic renewal payment plan, obtain the customer's informed consent and authorization, provide simple mechanisms to cancel, and provide confirmation of the authorization to the customer, among other notice requirements.

Before implementing any automatic renewal payment plan you should consult with legal counsel on compliance with applicable requirements. By using the HL Hunt Platform, you represent and warrant that your use of any automatic renewal payment plan complies with applicable automatic renewal requirements.

The information provided on this website does not, and is not intended to, constitute legal advice. All information, content, and materials available on this website are provided for general informational purposes only.

2. Card Brand Requirements

Visa and Mastercard impose disclosure and related requirements on merchants that sell goods or services through automatic renewal payment plans (recurring or subscription payments).

Mastercard

  • Disclose the subscription terms when collecting the payment credential, including the price that will be billed and the frequency of the billing, as well as any trial period.
  • Display the subscription terms on any payment or order summary webpage and capture cardholder's affirmative acceptance before completing the order.
  • After cardholder completes the subscription order, send an email confirmation or other electronic message that includes the subscription terms, a transaction receipt, and clear instructions about how to cancel the subscription.
  • For any subscription where billing frequency is every 6 months or less, send an electronic reminder to the cardholder at least 7 days but no more than 30 days prior to the next billing date.
  • Provide an online or electronic cancellation mechanism or clear instructions on how to cancel that are easily accessible online.
  • Provide the cardholder with written confirmation at least 7 days in advance when a trial period expires, subscription billing terms change, or the recurring payment schedule is terminated.
  • For trial periods longer than 7 days, send a reminder notice at least 3 days before the renewal and include basic terms of the subscription and instructions on how to cancel.

Visa

  • At the time of enrollment, obtain the cardholder's express consent to the recurring transactions. Disclose the fixed dates or intervals on which recurring transactions will be processed.
  • At the time of enrollment, send an electronic copy of the terms and conditions of the recurring payments to the cardholder.
  • If the recurring payments involve a trial period, disclose the length of the trial period, and send an electronic reminder notice with a link to online cancellation at least 7 days before initiating a recurring transaction after the trial period ends.
  • Provide a simple cancellation procedure. If the purchase was online, provide at least an online cancellation procedure.

3. Common Practices for Compliance

Before implementing an automatic renewal payment plan you should consult with legal counsel. Common practices for recurring payments compliance may include:

  • Disclose material terms clearly and conspicuously before collecting the payment credential, including: identity of the merchant, description of goods or services, cost or price (including any introductory/trial price and the regular price), existence of the recurring payment plan (amount and schedule), length of any trial period, and how to cancel.
  • Display subscription terms on any payment or order summary webpage and capture cardholder's affirmative acceptance before completing the order.
  • Obtain informed consent through a written agreement, which may include having the purchaser check a box or provide a similar electronic signature confirming review and consent.
  • Provide cancellation mechanisms — an online or electronic cancellation mechanism or clear instructions on how to cancel that are easily accessible online (such as "Manage Subscription" or "Cancel Subscription" links).
  • Send confirmation of the transaction and recurring payment schedule that includes subscription terms, payment amounts and schedule, cancellation policy, and how to cancel.
  • Send reminder notices with the payment amount and cancellation information prior to the next scheduled payment. For annual plans, send written reminder 30-60 days before the cancellation deadline.
  • Notify of material changes — before implementing any material change, provide clear notice and information on how to cancel prior to the change.
  • Handle trial periods — disclose the length, send reminders before renewal (Mastercard: 3 days before; Visa: 7 days before), and obtain explicit consent for recurring payments after the trial ends.