As we shared last week, the Coronavirus has impacted many aspects of the business world including upcoming changes to VISA’s Free Trial program. VISA has announced it is going to move forward with new regulations of free trials or introductory offers to its clients beginning April 18th. Segpay is ready to implement these updates and will have them in place.
There is one aspect of the regulations that won’t be implemented for another year, the requirement of an additional description indicating that a “free trial” or “trial period” and a paid subscription is about to begin. Segpay’s merchants will receive an e-mail notification seven days before a trial converts. The effective date of this requirement is April 17, 2021.
VISA Postpones Free Trial Update
VISA has decided to delay the implementation of its free trial update by three months because of the deadly Coronavirus. Segpay CEO Cathy Beardsley recently explained the new VISA changes in her January 2020 XBIZ column. The new regulation will apply to merchants selling either physical or digital goods and services through free trials or introductory promotions.
“This regulation will impact acceptance, disclosure, and dispute policies if your ongoing subscription or recurring agreement is different than the price or period the customer signed up for initially,” said Beardsley. “It was designed to make canceling offers easier and make dispute rights clearer.”
Some changes include:
- The email notification must include some specific disclosures such as the subscription agreement, the start date, details of the goods and services, ongoing transaction amount and billing frequency, and a simple method to cancel online (very little will change here for most merchants).
- The descriptor for the first financial transaction will now have to include the word “trial.”
- If the free trial or introductory promotion is over seven days in length, the consumer must be notified seven days before the next transaction is initiated. They must also be provided with an easy method to cancel online.
Segpay has already implemented these updates but will wait to put them into place until July 17, 2020, the new date it will be required by VISA. To read VISA’s entire free trial regulation click here. If you have any questions we are happy to help, please reach out at [email protected].