New regulations that are relevant to all merchants processing subscription transactions with Mastercard have gone into place as of September 2022.
In 2019 and 2021, Mastercard set forth regulations governing behavior for merchants processing subscription transactions and/or selling free trial or negative billing option subscriptions. As a part of these rules, merchants are required to capture explicit consent from customers purchasing a subscription with a free trial or negative option billing model associated and provide certain notifications throughout the lifecycle of a subscription.
As of September 2022, additional regulations have gone into place that might require you to take action.
All merchants are responsible for their compliance status relative to these regulations.
Please read the following article for information on the new 2022 regulations and what your business needs to do to stay compliant.
Information pertinent to the 2019 and 2021 changes are contained in the following articles:
What has changed?
Read on for a summary of the new regulations from Mastercard
Subscription Notification Requirements (All Subscriptions)
As of September 22, 2022, Mastercard now requires that merchants deploy specific notifications to consumers that purchase subscriptions. These notifications must contain specific information about the order, information about future billing and instructions to cancel the subscription.
For all subscriptions:
Immediately after the cardholder completes their subscription order, the merchant must promptly send a subscription order confirmation to the cardholder through an email message or other electronic communication method that includes the subscription terms and clear instructions on how to cancel the subscription.
Each time that the merchant receives an approved authorization request, the merchant must provide the cardholder with a transaction receipt through an email message or other electronic communication method that includes instructions for canceling the subscription (and thereby withdrawing permission for any subsequent recurring payment transactions).
For any subscription where the billing occurs less frequently than every six months (180 days), the merchant must send an electronic reminder to the cardholder at least seven days, but no more than 30 days prior to the next billing date that includes the subscription terms and clear instructions on how to cancel the subscription.
Subscription Notification Requirements (Free Trial or Negative Billing Option Schemes)
Merchants deploying a free-trial or negative billing option scheme (with a difference in price between the first billing event and the subsequent events) to their consumers must deploy the following notifications as described:
For all free-trial or negative billing option scheme subscriptions:
Each time the merchant receives an approved authorization request, the merchant must provide the cardholder with a transaction receipt through an email message or other electronic communication method (such as an SMS "text message" including instructions for terminating the recurring payment transaction cycle (such as canceling the subscription service). If the merchant provides the cardholder with a Transaction receipt after a declined authorization request, the transaction receipt must state the reason for the decline response.
The merchant must provide the cardholder with written confirmation in either hard copy or electronic format at least seven (7) days in advance when any of the following events occur:
The merchant is revising the subscription billing terms
The recurring payment transaction cycle has been terminated by either the merchant or the cardholder, in which case the notice must be sent no more than seven days after the cardholder's decision to cancel.
For digital or non-tangible goods and services offering a trial period longer than seven days - No less than three (3) days and no more than seven (7) days prior to end of trial period, the merchant must send a reminder notification to the cardholder that the subscription plan will commence if the cardholder does not cancel or whenever terms and conditions will change. This notification must include the basic terms of the subscription and clear instructions on how to cancel. This reminder can be completed by email or any other electronic methods.
For physical products:
The acquirer must process all subsequent recurring payment transactions using the same Merchant ID in DE42 (Card Acceptor ID Code) and Merchant name in DE43, subfield 1 (Card Acceptor Name) as the Acquirer used for the initial transaction.
After the trial period has expired, the merchant must provide the following information to the cardholder and receive the cardholder's explicit consent in relation to this information before the merchant may submit an authorization request for the initial recurring payment transaction for the full-size or regular price product:
The date the subscription period begins
The transaction amount
The payment date of the transaction
The merchant name as it will appear on the cardholder's statement
Instructions for terminating the recurring payment transaction cycle (canceling the subscription service) at the cardholder's discretion
Explicit Consent Requirements
Merchants providing ongoing and/or periodic delivery of physical products or digital goods must disclose the subscription terms simultaneously with a request for card credentials.
The disclosure must include the price that will be billed and the frequency of the billing. For example, "You will be billed USD 9.95 per month until you cancel the subscription."
Merchants that utilize a negative option billing model must also disclose the terms of the trial, including and initial charges, the length of the trial period and the price and frequency of the subsequent subscription. For example, "You will be billed USD 2.99 today for a 30-day trial. Once the trial ends, you will be billed 19.99 each month thereafter until you cancel."
Merchants must:
Clearly and prominently display the subscription terms on any payment and order summary webpages
Capture a cardholder's affirmative acceptance of the subscription terms BEFORE completing the subscription order.
Mastercard further requires that merchants capture explicit consent from consumers for rebills related to subscriptions that begin with a "negative option billing scheme". These schemes include "free trial" subscriptions for physical goods or any subscription where there is a price difference between the initial sale and future rebills.
Cancelation Requirements
Merchants must provide an online or electronic cancellation method or clear instructions on how to cancel that are easily accessible online. Examples include a "Manage Subscription" or "Cancel Subscription link on the merchant's home page.
What Paysafe merchants need to know
Paysafe is enforcing the adoption of these new regulations among their merchant base. Enforcement will vary by payment provider, but all merchants are responsible for their own compliance status relative to these new regulations.
The above-mentioned notifications will be deployed by sticky.io directly to subscribers on your behalf in conjunction with orders corresponding with the above categories.
Screenshots for the email notification contexts being deployed on your behalf can be found within the following links:
As it relates to the deployment of subscription notifications or consent-capture, no action is needed at this time. However, as with any Mastercard regulations, compliance is the responsibility of each individual merchant.
Please note that SMTP profiles configured through your sticky.io Platform instance MUST be created using legitimate information to keep your business in compliance. With improperly configured SMTP profiles, email deployments might fail and this may result in your business falling out of compliance.
Merchants must still ensure their own compliance with the cancelation requirements described above.
What non-Paysafe merchants need to know
Action is required on your part to stay compliant with the above regulations. The above-mentioned notification contexts must be deployed to your consumers. Plain-text email templates are contained below for your convenience.
For merchants deploying a free trial or negative billing option scheme as described above, explicit consent must be captured from all consumers and the corresponding rebill reminder notifications must be deployed at least 7 days prior to initiating a recurring transaction.
Enforcement of the above regulations will vary by payment provider, but as with any Mastercard regulations, compliance is the responsibility of each individual merchant.
Email Notification Templates
The following plain text email notification templates are provided as examples of the notifications that non-Paysafe merchants can deploy to stay in compliance with the aforementioned regulations. Please refer to the "What has changed?" section of this article for a breakdown of which notification contexts are necessary for your business based on the products you are selling and the billing models you are employing.
Trial Receipt Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. We have processed your recent order at {website}. Thank you for trying our product. Your trial will start when you receive the product. At the end of your trial we will contact you to confirm whether you wish to continue receiving this product after the trial period has ended.
Please find the summary of your order below:
Order Date:{orderdatetime}
Total Amount Billed:{ordertotal}
End of Trial/Rebill Date: {nextsubscriptiondate}
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.
Consent Request Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. We have processed your recent order at {website}. Your Trial will end soon. Please provide your consent if you wish to continue receiving this product
Please visit {consent_url}{consent_token} to opt-in to your subscription
Please find the summary of your order below:
Order Date:{orderdatetime}
Total Amount Billed:{ordertotal}
End of Trial/Rebill Date: {nextsubscriptiondate}
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.
Rebill Receipt Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. We have processed your recent order at {website}. Your Order for these products has been processed.
Please find the summary of your order below:
Order Date:{orderdatetime}
Total Amount Billed:{ordertotal}
Rebill Date: {nextsubscriptiondate}
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.
Rebill Decline Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. We have processed your recent order at {website}. Your Order for these products has been declined.
Please find the summary of your order below:
Order Date:{orderdatetime}
Total Amount Billed:{ordertotal}
Rebill Date: {nextsubscriptiondate} Does this need to come from the decline/rebill date or remove?
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Declined
Decline Reason: {xx}
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.
Cancelation Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. This Subscription has been canceled. You will not be billed anymore nor will you receive subsequent communication on this subscription.
Please find the summary of your order below:
Order Date:{orderdatetime}
Cancellation Date: {canceldate}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
Consent Confirmation Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for continuing your subscription!
Please find the summary of your order below:
Order Date:{orderdatetime}
Total Amount Billed:{ordertotal}
End of Trial/Rebill Date: {nextsubscriptiondate}
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Order Number: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate} {shippingcountry}, {shippingzipcode}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate} {billingcountry}, {billingzipcode}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.
Subscription Start Reminder Notification
Hi {shippingfirstname} {shippinglastname},
Thank you for doing business with us. We have processed your recent order at {website}. Thank you for trying our product. At the end of your trial, you will be billed for the amount listed below.
Please find the summary of your order below:
Order Date: {orderdatetime}
Total Amount Billed: {ordertotal}
End of Trial/Rebill Date: {nextsubscriptiondate}
Next Billing Amount: {nextsubscriptionamount}
Merchant Billing Descriptor: {descriptor}
Transaction Status: Approved
Transaction ID: {transactionid}
Authorization Code: {authcode}
Transaction Type: Purchase
Card Type: {cardtype}
Card Ending In: {cclast4}
Order ID: {orderid}
Subscription ID: {subscriptionid}
Shipping Address
{shippingfirstname} {shippinglastname}
{shippingaddress} {shippingaddress2}
{shippingcity} {shippingstate}
{shippingzipcode}
{shippingcountry}
Billing Address
{billingfirstname} {billinglastname}
{billingaddress} {billingaddress2}
{billingcity} {billingstate}
{billingzipcode}
{billingcountry}
{phone}
{emailaddress}
Company Information:
{website}
{customerservicenumber}
To cancel this subscription, please visit {cancellation_url} and follow the cancellation instructions on the home page.For more information, please visit the following links and review the related information:
Mastercard: Transaction Processing Rules [ Reference sections 5.4.1 and 5.4.2 ]
Additionally, reference the following sticky.io Help Center articles for information on how to stay compliant with Mastercard's other regulations: