Expressed Consent Guidelines
High-Risk Negative Option Billing Requirements
New Mastercard regulations affect negative option billing merchants. A negative option billing merchant provides a consumer with a sample of a physical product at no cost or nominal cost. The consumer agrees to an ongoing subscription after which the merchant ships the product on a recurring basis and charges the consumer full price.
The typical model is as follows
Product is free on Day 1
Consumer is charged for the “free trial” on Day 14
Consumer is then shipped new product and charged again on Day 30
When do these new regulations take effect?
The new standard will take effect on April 12, 2019. Merchants, processors, and acquirers must be compliant by that date. The new standard affects all merchant accounts, including those obtained prior to April 12. However, it only affects new subscriptions starting on April 12. Subscriptions started prior to April 12 are exempt.
MCC Classification: Negative option billing merchants that provide a physical product will be assigned the MCC of 5968: Direct Marketing—Continuity/Subscription Merchants.
Acquirers must register the merchant through the Mastercard Registration Program
Acquirers must code any transactions originating from high risk negative option billing.
It will be the responsibility of the acquirer and merchant to assign the appropriate MCC and register with Mastercard. No action is needed within Konnektive.
Paysafe
1.Sales affected by these requirements
Konnektive determines that a trial fits the negative option billing profile if the following conditions are met:
The Expressed Consent plugin is enabled. Go to Admin > Plugins > Express Consent
The MID is flagged as Enrolled in Express Consent
The product is billed on a recurring basis
The product is shippable on cycle 1
The product cycle 1 price is less than the cycle 2 price
2.Transactions must include the Website URL where the cardholder requested the product.
Merchants using the Konnektive API will be responsible to send the “salesUrl” with the Konnektive Order Import API call.
Konnektive form code has been modified to send the checkout page URL. Merchants using a Konnektive lander package should download an updated version of the Konnektive SDK to obtain this functionality.
salesUrl will be sent on all NMI and Verifi transactions.
For Paysafe MIDs, the MID customer service URL will be sent if the transaction does not have a sales URL.
3.The trial period must begin on the date the product is received by the consumer.
Konnektive calculates delivery time as 4 days.
Merchants are advised to configure the trial period with this delivery time in mind.
4.Expressed Consent: After a trial and before any rebill occurs, the merchant must provide the following information to the consumer: Payment amount, payment date, secondary payment date (if applicable), merchant name as it appears on the cardholder statement (descriptor), and instructions for cancelling. The merchant must get expressed consent to the subscription before rebilling.
Konnektive requires merchants to send an “Expressed Consent” email or SMS message to the consumer. This message contains options for the consumer to accept or deny the subscription.
There are 3 required tokens on Expressed Consent communications:
[express_consent_details] = contains Payment Amount, Payment Date, Recycle Billing Date (if a recycle billing profile exists), and Merchant Name (MID descriptor)
[express_consent_yes] = for email, a link to click for consent. For sms, the code to text a consent reply.
[express_consent_no] = for email, a link to click for consent denial. For sms, the code to text a consent denial reply.
Merchants can design the rest of the email or sms message around these required tokens.
Expressed Consent will be automatically sent to the consumer at the end of the trial period (cycle 1 bill delay + 4 days).
If consent is given, the first rebill will take place immediately upon receiving consent. All subsequent rebills will occur as scheduled.
If consent is denied, the subscription is cancelled
If a consent reply is not received, the consent is automatically resent based on autoresponder setup. One automatic resend may be sent.
If a consent reply is not received, consent may be resent manually from the Purchase Details page.
It is the responsibility of the merchant to include cancellation instructions on Expressed Consent messages.
5.Send rebill and rebill decline notifications to consumer
- Merchants can utilize existing Konnektive autoresponder functionality to send Recurring Order and Recurring Order Decline messages.
The Recurring Order Decline autoresponders have a [decline_reason] tag which can be used to comply with the Mastercard regulation to include the reason for the decline.
The recurring order receipt needs to include cancellation instructions (customer service number or website url). It is the responsibility of the Merchant to do this.
6.Send written confirmation to the cardholder when the subscription has been canceled.
- Merchants can utilize existing Konnektive autoresponder functionality to send Cancellation messages.
7.Cancellation Policy: The merchant must provide a direct link to an online cancellation procedure on the website where the cardholder made the initial purchase. The merchant’s website must display a customer service phone number on the website maintenance page for periods during which the website is offline (such as for software updates, scheduled maintenance, or technical difficulties).
- It is the responsibility of the merchant to include clear cancellation instructions on all consumer communications and to maintain compliant websites.
8.Recurring Transactions: All recurring transactions must be processed under the same MID that was used for the initial payment transaction.
- Existing functionality in Konnektive requires that all rebills be on the same MID as the initial sale.
Humboldt
1.Trial Continuity
All trials that fit into the negative option billing model must be run on Visa only. This covers all merchant accounts, including those obtained prior to April 12, 2019.
Use of the Inovio Payments gateway is required.
Exceptions will be made on a case-by-case basis to allow merchants to process Trial Continuity transactions on the Mastercard network. The following will be required and apply solely to Mastercard should an exception be granted:
High-Risk registration with Mastercard
Explicit consent must be obtained from the cardholders. Follow the Paysafe documentation here to use Konnektive to obtain consent.
Mastercard may be disabled in Konnektive by campaign or by MID
Please click here to view the configuration requirements for Express Consent.