MasterCard No Longer Allows Automatic Billing at the End of Free Trial Periods

Via a blog titled “Free Trials Without The Hassle” (posted January 16), MasterCard recently announced they will no longer allow companies to automatically bill users after a credit card-requiring free trial period has passed.

Author Paul Petta wrote: “At Mastercard, we want every commerce engagement to be simple, safe and secure and we are introducing rules for merchants that offer free-trials to make this a hassle-free experience for their consumers.”

This is how the new rules and protections will work. First, users sign up for a free trial, providing their MasterCard card number for payment information. Then, when that free trial comes to an end, the merchant will be required to send a text or email notifying the user that they will have to pay to continue using or receiving the service – thus morphing the free trial into some form of subscription. That message must include the transaction amount, payment date and merchant name, along with explicit instructions on how to cancel a trial if the user so chooses.

Further, for each payment thereafter, the merchant will have to send a receipt to the cardholder, also via email or text and again with clear instructions on how to cancel the service if the user so desires. All charges that appear on the cardholder’s statement must now also include the merchant’s website address or the phone number of the store where the cardholder made the purchase.

“Free trial offers can be a legitimate and useful way to increase sales and improve consumer satisfaction. The new rules will help in increase transparency and ensure an outstanding experience for cardholders,” wrote Petta, who – somewhat ironically — has an author bio/archive on newsroom.mastercard.com that includes no information.

This initiative could have an array of impacts on the adult industry, ranging from positive to prohibitive. For instance, MasterCard’s new policy may cultivate enhanced feelings of safety in porn consumers who remember the industry’s early, scammy days on the internet. Conversely, it may serve to dissuade users from signing up for anything involving a rebill in the first place.

“This could be a big deal for [the adult industry],” Takedown Piracy owner Nate Glass told YNOT. “Only thing is, I’ve never seen a MasterCard in usage in my life.”