Visa is changing their rules governing free-trial and promotion driven subscriptions on April 18, 2020. Stripe is actively working to make sure that your business has the information it needs to be compliant with the new rules. We have included the following FAQs to help you understand the changes and you can read more about it on Visa's Trial Subscription Updates flier. If you have additional questions, contact Stripe Support.
I offer a subscription that does not have a free or promotional trial. Do these changes apply to me?
No, these rule changes do not apply to you.
I always offer coupons to new customers, does that count as promotional?
No, if you offer every new customer a discount regardless of the type subscription, these changes do not apply to you. Only free and promotional trial subscription merchants (such as seasonal offerings, etc.) need to comply.
I don't collect credit card information when I set up a free trial. Do these changes apply to me?
No, these changes don't apply to you because a customer is actively giving you card information for a paid subscription vs. setting up a free trial that automatically converts to a paid subscription.
Why are subscription rules changing?
Subscriptions can sometimes cause customer confusion, especially when free and promotional subscriptions charge customers long after signing up. The subscription rules are changing in the interest of protecting consumers and making it clear to them when and how much they will be charged.
What is “negative response” and “negative option” marketing?
"Negative response” and “negative option” marketing is where the default option is that the customer is charged for a product or service, without any action on their behalf. It can create a poor customer experience, if the customer thinks they have been charged without an opportunity to decline or cancel. These new rules are, in part, a response to an increase in this type of marketing.
How can Stripe help me comply?
Stripe builds compliant products by design. For users who have built a unique subscription customer experience, we will help identify the areas that you need to update.
My customer now has to opt-in to a subscription, how do I do this?
The main goal is to make sure customers are clear about the terms of a subscription. The network rules require that you obtain express consent prior to collecting payment information (referred to as “customer opt-in”) to the following core aspects of the trial trial or promotion:
Frequency of charges and amount
Terms of Cancellation
We will not dictate how you obtain this consent, that will depend on the nature of your business. However, depending on your Stripe integration, we do provide functionality that can help facilitate your compliance (for example, if you use Stripe Checkout, compliant card mandated language will be displayed).
I do not offer electronic cancellation of subscriptions, is that acceptable?
Unfortunately no, you need to build an online or SMS way for your customers to cancel their subscription. If you are a Stripe Billing user, see "I'm a Stripe Billing user, do these changes apply to me?" below. You can also use the customer portal to provide customers the ability to cancel their subscription.
Does the timing of the trial expiration email and the initial confirmation matter?
The most important thing is to give your customers clear information about the terms and conditions of subscription they just signed up for. The networks give you the option to include information about the trial expiration in the initial email but your business should decide if you want to send your customer this information separately.
What if a free trial is less than 7 days?
That’s acceptable; you don’t have to change the trial period. You just have to let your customers know when the free trial ends and the terms and conditions of your cancellation policy.
Do I have to email my customer 7 days before every new subscription charge?
No, you only need to send the reminder before the date that it converts to a paid subscription. The subsequent transactions can be processed according to the terms and conditions that you and the customer agreed to before completing the purchase.
What is an Enhanced Merchant Descriptor?
The goal of this rule is to ensure that when a free or promotional subscription transitions into a paid subscription, a customer can quickly identify it in their credit card statement. This means that the first amount charged should use the enhanced descriptor. The networks do not specify what it should say, but it should display something that makes it stand out (e.g.,* TRIAL END*).
How does this change how I respond to Subscription-related disputes?
Any disputes related to subscription charges after April 18, 2020 need to adhere to the new rules. As a result, if you do not make the required changes and a customer disputes the charge, you will lose by default. To ensure that your business can continue to dispute invalid chargebacks, make the changes by April 18, 2020.
I am a Stripe Billing user, do these changes apply to me?
As with any network changes, it is the responsibility of each business to determine what is within scope for you. Stripe Billing does have solutions to help make complying with rule changes easier if you choose to use it.
We have existing tools like email reminders and receipts that will be updated with new requirements.
Stripe Billing provides the customer portal, a hosted solution where customers will be able to manage their subscriptions and billing details.
If you do not host trial information with Stripe Billing or use other tools in conjunction with Stripe Billing, we recommend reviewing your customer/product flows to understand what adjustments you might need to make.