Merchants

What are the requirements on recurring payments?

Starting a new Subscription

• Subscription products or services should be defined in Recurring Payments Terms
• Recurring Payments Terms should be clearly available to all visitors and customers
• In the subscription step of the customer's journey, merchant should clearly indicate to the customer that they are accepting Recurring Payments Terms and that they will receive a reminder before each recurring charge

Customer must give explicit consent to Recurring Payments Terms

• before completing the transaction, and
• separately from any other Terms and conditions (e.g. by checking a box with a link to Recurring Payments terms), and 
• separately from any other confirmation actions (e.g. Submit, Pay) 

The email receipt for an initial recurring transaction must include the following information: 

• indication this is a recurring payment
• clear payment schedule depicting when and how frequently the charges will be made,
• duration of the payment plan stating for how long the customer agrees to pay

Click here for the required content of Recurring Payment Terms <link to Additional Information at bottom of page>

Informing the customer on a newly started Subscription plan

Within 2 business days after starting a new subscription, merchant must provide the customer with email confirmation of the establishment of the Recurring Transaction Agreement, containing following information: 

• URL to Recurring Payments Terms 
• information and URL where client can unsubscribe from Recurring Payments

Charging or changing a subsequent recurring payment

Merchant will send an email reminder to the customer before each charge, that should contain:

• URL to Recurring Payments Terms ,
• information and URL where client can unsubscribe from Recurring Payments,
• amount to be charged
  
• If the transaction amount exceeds a pre authorised range, the merchant will notify the customer. Local law may impose specific requirements for this notification.
• Customer must also be notified of any change to the amount or date of the recurring transaction, especially in case of unscheduled Credential-on-File transactions

Changing Recurring Payments Terms

• Merchant will notify customers of any changes to the Recurring Payments Terms
• Notification should contain instructions and links on how to cancel the Recurring Payments and should happen 7 business days before the next charge.
• In case of any changes to Recurring Payments Terms, customer cannot be billed unless they explicitly accept new Terms. Merchant should retain a record of the cardholder’s confirmation to the new Terms.

Exceptional recurring charges

Merchant will notify the cardholder prior to the Recurring Payment being processed in any of the following situations, if:

• more than 6 months have elapsed since the previous Recurring Transaction
• a trial period, introductory offer, or promotional period is going to end

Merchant is not allowed to have a cardholder’s free trial rollover into a paid subscription without first notifying the cardholder prior to the end of the trial.

Cancellation of a recurring subscription

• Merchant will cancel the customer's subscriptions as soon as the customer has requested and send a confirmation of the cancellation to his email. Cardholder will receive cancellation confirmation including when the last billing will occur if this has not already occurred, or if a credit is due when the credit will be processed
• Merchant must not bill the cardholder and deliver products/perform services after receiving notification of subscription cancellation by the cardholder or Issuer
  
• In the event of a non-approval response from the issuer for the 1st transaction in subscription, no subsequent Recurring Transactions should be submitted, subscription should not be formed, and the merchant should address this matter with the customer. 
• If either the initial charge or the account verification request (zero amount) is declined, the payment information should not be stored

Recurring Payments Terms (should contain)

• description, name and list of services, for which a cardholder’s credit card will be charged,
• amounts of the recurring transactions, and whether the amount is variable or fixed, including rules and conditions of amounts change,
• transactions currency,
• where surcharging is permitted, acknowledgement of any surcharge assessed and the associated disclosures,
• duration and frequency of automatic charges, or specific calendar dates when card will be automatically charged, whether the dates are fixed or variable, and on what conditions the recurrent payment date depends on,
• disclose how the stored credentials will be used,
• PCI DSS level and PCI compliance information,
• statement on time when customers card will be debited,
• cancellation rules clearly describing how to cancel a subscription,
• for Unscheduled Credential-on-File Transactions: the description of event that will prompt the recurring transaction,