New Mastercard regulativ for nutraceutical merchants
Mastercard is second largest card issuer in the world, and is one of two card brands mainly used with negative option billing merchants. They are now in the process of rethinking their regulations when it comes to negative option or “free trial” billing.
What does this mean to me and my business? The policy changes is for the most part to effect nutraceutical (nutra) merchants but will have an impact on all business’ using this billing model to sell psychical products. Keep reading, so you can find out what you need to do in order to stay complaint.
What are the changes from Mastercard
There will be a few changes happening from Mastercard and we will highlight them herunder in order for you to be able to understand and become compliant.
- MCC Classification
Negative option billing merchants will be changed or accepted as MCC – 5968 with paymen processors under the name: Direct Marketing—Continuity/Subscription Merchants.
- High Risk Merchants
Merchants who utilize negative option billing to sell physical goods, will be deemed “High Risk Merchant“.
- Added to the MRP – Mastercard Registration Program
Acquiring banks has to include all merchants involved with negative option billing into the MRP to be compliant with the new rules.
- Contact Information Compliancy
Must list URLs where consumers has shopped their products into data element 43, subfield 1 in the dual message system. In addition to adding customersupport numbers on maintenance pages when down or offline etc. This is for Ecommerce Merchants.
Show customersupport numbers for the merchant, a number which is reachable worldwide. This has to be added into the dual message system under private data subelement 0170, subfield 1. This is for Moto Merchants.
- Cardholder accessibility
Must list all third-party partners whom has access to the credit card information as a part of the on-boarding process. This will mean CRMs, Gateways and more. The acquiring bank then has to submit this to Mastercard.
- Trial date changes
Mastercard has invoked that the trial date starts on the date of receival not on the date of purchase.
- Trial Period Ends
After the trial periods comes to a halt, the merchant has to reach out to the card holder and share with them these informations:
1. Amount charged
2. Date of charge
3. Date of second try in case of limit exceeded or other reason code (If applicable)
4. Merchant name as shown on bank statement
5. How to cancel
Merchant also needs to get consent from card holder prior to authorization request.
- Continous Processing
All deduction must match informations throughout the subscription period
- Unsuccessful Attempt
If an authorization attempt is unsuccessful, the merchant must send the cardholder a receipt and explain why authorization was declined.
- Overlooking Transactions
Acquiring banks are obligated to check and make sure that all authorization messages are being overlooked and are bonafide. If over a 60 day period any activity deemed suspecious, acquiring bank must reach out to the merchant in order to verify transactions. This information is held for a year and shared with Mastercard.
- Cancellations Policies
All merchants has to apply cancellation policies on the website where the shopper shops, in order to stay compliant.
- Subscription Cancellation
All merchants has to if a customer stays active for multiple months, include a monthly receipt of purchase which includes a guide to cancel ones subscription.
- Cancellation Receipt
When a customer cancel their account or subcription, a subcription confirmation has to be sent to the customer.
This is how the new rules for negative option billing is looking from April 12, 2019 with Mastercard will be looking. So if you aren’t already compliant, you need to become it before the date shown above.