Mastercard

Mastercard Slams Brakes On Subscription Auto Opt-In Billing

Mastercard Won’t Use Name In Logo Anymore

Mastercard has announced that it is introducing new rules for merchants that offer free trials, requiring them to get cardholder approval when the trial ends 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 and merchant name along with explicit instructions on how to cancel a trial,” according to a press release from Mastercard.

Once the cardholder approves, the merchant will also be required to send a receipt for each transaction by email or text message with instructions on how to cancel the service if needed. And all charges on the cardholder’s statement must include the merchant website URL or phone number of the location where the purchase was made.

“Free trial offers can be a legitimate and useful way to increase sales and improve consumer satisfaction. The new rules will help increase transparency and ensure an outstanding experience for cardholders,” the company stated.

Free trials have been a successful way for companies to attract new customers, especially subscription services. In fact, data from the Subscription Commerce Conversion Index (SCCI) found that 65 percent of the best performers in subscriptions offer free trials, with the best converters seeing 25 percent of free trial customers becoming paying subscribers.

“Think of it this way: a free trial is not giving away your product for free, but rather making your user acquisition process more effective,” said Kristin Eberth, director of marketing and communications for Press Reader. “You’re making it easier for people who need and want your product to become paying customers. You’re bringing them partially on board without having to address every one of their questions, hesitations and concerns. And from their point of view, you’re bearing all of the risk if they don’t like your product, rather than forcing them to incur a financial risk. The free trial helps to minimize friction for users at the outset.”

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