What is continuity billing and which card rules apply?
Continuity billing means a merchant ships goods or provides a service repeatedly and charges the stored card each time until the customer cancels, often after a free or low-price trial. Each charge is a recurring merchant-initiated transaction. Visa and Mastercard require clear enrollment terms, a reminder before a trial ends and easy cancellation.
In detail
Continuity billing is a recurring model where the customer keeps receiving goods or services, and keeps being charged, until cancellation. Each charge is a recurring transaction, which is one type of merchant-initiated transaction.
Scheme rules for trials and renewals
- Visa, since April 18, 2020: express consent at enrollment, a confirmation with the terms, a reminder with a cancellation link at least seven days before a trial ends, and an easy online way to cancel.
- Mastercard, since September 22, 2022: a confirmation after enrollment, notice before a trial longer than seven days converts, and cancellation instructions.
Why schemes regulate it
Trials that convert silently create disputes. Cardholders who do not recognize a charge call their bank, and the merchant’s dispute ratio rises. Reminders and receipts cost little and prevent most of these cases.
Operators should treat these notices as part of the billing product. The subscription engine page describes how plans and billing dates are managed, and a retry policies matrix defines what happens when a renewal is declined. The general framework is explained in CIT vs MIT.