Mastercard has recently released new requirements for free trial conversions.
We believe this reflects a positive change in subscription commerce, where more customer transparency and ease of cancellation leads to better subscriber relationships and limits to chargebacks.
Luckily, subscription businesses using Recurly are prepared for these Mastercard changes, with several features available on all plans:
Recurly supports Trial-Ending Emails. These emails are sent three days before the subscription is set to renew and can include all the information required by Mastercard: renewal date, price, company name/info, cancelation link, and more.
Recurly supports sending reminder emails in advance of each subscription renewal. By default, these emails are sent seven days before renewal but their timing can be customized.
Mastercard requires that “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.” Recurly’s Payment Confirmation (or New Invoice emails, for manual invoices) can be customized to include this information.
All emails can be edited at https://app.recurly.com/go/emails. Additionally, the emails can be enabled or disabled on a plan level.
For merchants who do not have a self-service account management portal, Recurly’s Hosted Account Management pages allow for quick compliance. Each of the above Recurly emails allows for a “account_hosted_maintenance_url” parameter. When placed in an email, this gives your subscribers a one-click login to their Recurly account to cancel, make online payments, or update information. These settings can be configured at https://app.recurly.com/go/configuration/hosted_pages.
The final component of Mastercard’s change reflects the information that is displayed on a subscriber’s credit card statement. This information is not managed by Recurly, so contact your merchant service provider to ensure compliance.
Monitoring these changes will be important in understanding the impact of any regulatory changes. Monitoring your Churn Analysis report may indicate any overall impact on voluntary churn. You can also monitor the effectiveness of your trial periods with Recurly’s Trial Performance report. We also recommend working with your merchant bank account provider to see if this change reduces any chargebacks.
Mastercard's free trial rules are new, and we strongly recommend a review of Recurly, payment gateway, and merchant account settings to ensure compliance.