UPDATE: Mastercard has clarified that this new free-trial policy is only applicable to physical goods.
When it comes to online services and subscription, you probably have seen free trial offers which require your credit or debit card upon registration. While this is a great way to test out new services, sometimes it can be troublesome to unsubscribe and you’re stuck with a service that you didn’t intend to continue.
To protect consumers, Mastercard has introduced a new policy when it comes to free trial offers. While Merchants are allowed to collect your card information when you sign up, they must get permission from you before they can start charging.
According to Mastercard, they want every commerce engagement to be simple, safe and secure, and this new rule is introduced to provide a hassle-free experience for consumers. Merchants will need to gain the cardholder’s approval at the end of the trial before they can start billing.
To do this, merchants will have to contact the cardholder either by email or SMS with details of the transaction amount, payment date and merchant name. They must also include instructions on how to cancel the trial. On top of that, the merchants are also required to send the same details to the cardholder for every subsequent transaction with clear instructions to opt out. To make it easier for cardholders to track, the card statements will also include the merchant’s URL or phone number.
Overall, this is a great initiative to protect online users especially when it is very easy to forget when your free trial is ending. We have reached out to Mastercard about this policy in our region and we will update once we have more info.
