[Update 1/19/19: Mastercard added an update to their press release that the change will only affect physical products, not digital subscriptions. Yawn…most subscriptions are digital. My guess is they intended for this to be on digital subscriptions too, but got blowback from large digital subscription providers, and were forced to change it to apply only to physical items.]
Mastercard announced today that they’ll now require merchants to get approval of the first charge after a trial before they can charge you.
 The rule change will require merchants to gain cardholder approval at the conclusion of the trial before they start billing. To help cardholders with that decision, merchants will be required to send the cardholder – either by email or text – the transaction amount, payment date, merchant name along with explicit instructions on how to cancel a trial.
For each payment thereafter, the merchant will have to send a receipt to the cardholder for each transaction by email or text message with clear instructions on how to cancel the service if the consumer so desires. In addition, all charges that appear on the cardholder’s statement must now include the merchant website URL or the phone number of the store where the cardholder made the purchase.
My initial read was that they’ll require merchant to get an opt-in approval for the first charge. But a closer look at the language leads me to believe that it’ll be enough for the merchant to send you an email with instructions on how to cancel. Meaning, they don’t need opt-in level approval, rather they are required to tell you about the impending charge and give you the opt-out option. For subsequent charges, they don’t need to send you notification beforehand at all, but they have to notify you afterwards.
That’s my read, at least. A lot of companies, especially the large ones like Amazon and Netflix, already have this kind of system where they notify you before the large charge, though I don’t think many subscription services send a monthly receipt of charge.
I’m also hopeful that this will knock out the likes of WSJ who require calling in to cancel, but that’s not all all clear since it may be considered enough to instruct you on calling in, without giving an online cancel option.
Overall, a nice little change. It’ll probably get me to use Mastercard on subscriptions, especially those that I’m planning on cancelling.
Hat tip to reader Feb
