Mastercard has announced plans to implement a new policy for merchants that retain credit card information. This means that with Mastercard, free trials leading to unexpected payments are no longer a thing.
As per the new rules, the card giant will require this type of merchants to request an official authorisation from the customers prior to billing for recurring subscriptions, once the trial period ends.
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Mastercard free trials
Merchants will have to text or email transaction amount, payment date, name and detailed instructions on cancellation of the free trial.
A statement from Mastercard read: “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 every subsequent payment, merchants will be required to send the cardholders a receipt as well as instructions to cancel the service.
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By GlobalDataMastercard added that all charges on the cardholder’s statement must include the merchant website URL or phone number of the store where the purchase has been made.
The company added: “The new rules will help in increase transparency and ensure an outstanding experience for cardholders. In addition to these changes, Mastercard cardholders are also covered by our Zero Liability policy which protects them against unauthorised purchases or charges.”
Matt Schulz, Chief Industry Analyst at CompareCards, said: “Millions of Americans have signed up for a free trial, forgotten about it and ended up getting billed for the service when the trial ends. It’s an annoying, frustrating experience, but this move by MasterCard seems like it might make that much less common in the future.
“This is great for consumers, but it is likely to scare the pants off of some businesses. It’s in many companies’ best interest for you to forget that you signed up for that free trial. In fact, many companies’ business models are heavily dependent on you doing just that. This move seems like a major threat to that way of doing business.”
Mastercard moves
Mastercard recently decided to remove the company’s name from its logo of two intersecting circles in order to reinvent its brand in digital age.
The company is working towards becoming a payments and technology firm, instead of just a card network.
Besides credit, debit and prepaid cards, Mastercard now offers digital innovations such as Masterpass for secure online transactions, along with digital remittance solutions.
The latest change to the company’s brand identity follows an update made in July 2016, where it changed the name in the logo from ‘MasterCard’ to ‘mastercard’.
