What are the Visa and Mastercard Trial Rules and How do They Affect Merchants?

The once confusing world of trial rules has new clarity, so what does that mean for you and your business?

Many merchants offer free trials, as it is often essential that their consumers try out products before they go all-in with a rolling subscription. Receiving a product and being dissatisfied will likely lead to a chargeback, leaving consumers unhappy and merchants bearing revenue loss and increased chargeback ratios, which can threaten their ability to process payments.

Some merchants used to set up sneaky ways to “trap” consumers into subscriptions, leaving them to pay for recurrent services without their knowledge. However, with Mastercard’s and Visa’s current rules, consumers now have better protection, and it’s essential that you, as a merchant, are aware of these.

Mastercard and Visa now have stringent rules regarding trials for consumers. Although their rules are similar in some areas, there are other areas they differ. In this post, we will explore what each of these companies’ trial rules is, and how these may affect your business.


A Few Similarities

Both Mastercard and Visa introduced trial rules for the same foundational reason: for merchants to communicate more openly with their consumers to improve their experience. Mastercard made their new policies after receiving many complaints about deceitful merchant practices, including instances when consumers had enrolled in subscription plans without their knowledge or consent.

One similarity with Mastercard and Visa is that they both brought in measures to regulate negative option billing—a payment plan that 1) implements and recurs until a consumer cancels the subscription (sometimes without their knowledge), 2) upsells, and 3) offers free trials that upgrade automatically into subscriptions without warning. In other words, negative option billing is an introductory offer that starts “free” or is discounted and goes to the regular price after the first billing cycle of the subscription.

As a merchant, it is essential for you to understand the policy differences between the two companies, especially if you use both Mastercard and Visa for transactions. This article will explain these differences to you, but if you need further consultation on these policies in regard to your business, free reach out to one of our payments experts to book a free consultation.

L3 Payments Merchant Services

Let’s take a look at these two credit card companies separately.


Mastercard’s Rules

Below is a list of Mastercard’s standout rules and what services their rules apply to.

Only applicable to physical products. Firstly, it’s essential to understand that Mastercard’s free trial ruling applies exclusively to physical products, like bath and hair products, and not to digital services like online dating. It protects the consumer by allowing them to freely cancel their subscription if they are not fully satisfied with their physical product.

No automatic billing. One problem consumers experience is that they sign up for a free trial and, without their knowledge or a warning, are enrolled in a subscription and billed recurrently. This can lead to unhappy consumers and cost them and their banks’ money. Therefore, as a merchant, permission from consumers is mandatory to continue any rolling subscription once the trial phase is over.

Easier to cancel. Subscriptions are no longer difficult to cancel, as Mastercard requires that, as a merchant, you have clear instructions on emailed billing receipts on how to cancel subscriptions. This particular rule has been put into place to increase merchant transparency which, in turn, will increase consumer satisfaction and lower return rates.

Approval at the end of a trial. Mastercard requires that merchants have cardholder approval once the free trial ends before the consumer is billed. Therefore, merchants must—either through text message or email—send the consumer the following information:

  • The name of the merchant
  • How much the transaction will be
  • The date of the payment
  • Exact instructions on how the consumer can cancel

Receipts from merchants to cardholders after every transaction. For every payment after the trial ends, a merchant must send a receipt to the cardholder every subsequent transaction. Therefore, a monthly subscription must come with a new receipt each month. It must also include explicit instructions on how the consumer can cancel the service.

All charges on the statement must include specific details. These details include the website URL, when the purchase was made, and the store’s phone number where the consumer made the original purchase.

Visa’s Rules

Applicable to physical and digital services. Unlike Mastercard, Visa requires their rules to apply to all merchant services. They protect all consumers who have enrolled in a free trial for any service, not just physical.

Simple to cancel. Visa requires that consumers must be able to cancel their subscriptions without difficulty. As a merchant, you must provide consumers the option to cancel by self-service means, through a text or an online cancellation form, for example. Visa’s goal is to make subscription cancellation as simple as unsubscribing from an email list to protect consumers.

Disclosure and expressed consent. At the end of a trial period, a consumer must consent to the upcoming charges through a subscription with a button that states explicitly “click to accept.” The consumer must also accept any changes to the subscription agreement like an upsell. Merchants are required to let consumers know the following:

  • Name of merchant
  • Description of goods or services
  • How long the trial period or introductory offer is for
  • Disclosure of charge to the consumer if they do not cancel
  • The date the trial begins (if required)
  • First transaction amount (if required)
  • What the cancellation policy is
  • The final four digits of the card the consumer used for the subscription
  • A link for the cardholder to cancel transactions with ease

Required is a receipt of transaction or written confirmation. Once a merchant obtains the consumer’s consent, a receipt or written confirmation is required, regardless of whether the card has been charged or not. It must be sent electronically, either by text message or email.

Two further notifications are required. 1) As a merchant, you must let the consumer know there is an upcoming transaction before the transaction date, and 2) you must update the consumer any time they alter subscription terms and conditions, including any changes like the billing period or price. You must send these notifications seven days or more before a transaction goes through, and must be sent electronically, via text or email. You must also send the consumer exact instructions on how to cancel their subscription, as is the case with all other communications you send to consumers.

The first transaction post-trial must be given a billing descriptor. A billing descriptor is how a company’s name appears on a credit card statement and how it is set up on a merchant account. Visa generally recommends that merchants use a memorable descriptor related to their company and, if possible, a web address. This allows the consumer to recall the transaction quickly and makes it easier for them to research it should they have any questions. For the unique billing descriptor, a merchant’s name must consist of an update that indicates clearly that any price is a trial price, so the consumer can easily see the discrepancy between whatever is on the consumer’s statement, app, or anywhere else they will see it.

Consumers can dispute various subscription payments with the merchant. This is not necessarily new. As any subscription merchant knows, consumers have long been able to dispute multiple transactions. However, it serves as a reminder that one chargeback generally leads to more of the same!



Mastercard and Visa put these new rules into place to further protect consumers and ensure that merchants use transparent practices to stop consumers from having to pay for something they didn’t explicitly consent to. Increased transparency leads to trust and happier consumers, banks, and merchants.

Merchants must remember that Visa and Mastercard work diligently to protect their brand and, in doing so, usually end up on the side of the consumer. Mastercard has a famous "Zero Liability Policy" where they tell consumers that they will not have to pay for it if they did not make a charge. In other words, they do not allow for any unauthorized purchases or charges to be put on the consumer’s account.

The good news is that each of the card brands are making headway by taking merchant concerns such as friendly fraud seriously (see: VMPI/Chargeback Reduction). However, as a merchant, it is essential that you work harder than ever to remain compliant and ensure that either card brand’s payment processing ability is not interrupted.

Subscribe to our blog

Recent Posts