Trial subscriptions are those that have an introductory trial period or initial promotional discount. E.g. ‘free for 30 days’ or ‘half price for your first month’.
VISA announced the new regulations earlier this year (2020). They require additional communication about when a subscription trial will end and how much will be charged. This means adding extra details to the emails and receipts that trialling users receive.
Free trials and discounts are a common way for SaaS sellers to attract new subscribers. But if the terms of a promotion aren’t clear, buyers are sometimes surprised by the first full payment and raise a costly dispute.
It can also be a bad user experience if they aren’t sure what they will be charged or when. But if the trial & payment flow is well communicated when they sign up, that can send a good message that you care about their experience. Which can in turn increase retention and improve word of mouth for your product.
That’s why catering to these requirements is not only necessary to meet VISA’s new standards, but will help to keep down chargebacks and build goodwill with customers from their first interaction.
Over the course of an introductory trial or promotion, the subscriber must repeatedly be provided with the following points:
This is shared across the following emails and transaction receipts:
The other subscription emails, like the optional pre-billing notifications and recurring subscription receipts, are unaffected by these compliance changes.
The more detailed receipts and emails discussed on this page only relate to any subscription which:
All other ‘regular’ subscriptions are exempt and will not show this additional information on emails & receipts, nor will we send non-trial subscriptions the additional emails, such as the enhanced notification or the initial transaction email.
No, these changes do not apply to you.
Paddle manages your subscription receipts and email flows so you don’t need to change anything; as your Merchant of Record we handle the necessary compliance and development work for you.
The only exception is if you are providing a trial/promo period on a subscription by using our Charges API. See below for more details on what you need to do in that situation.
If you are using the Charges API to manage a promotional or trial subscription yourself, then you will need to send the following required receipts and emails yourself. This is because we won’t be able to determine, for example, when the trial period will expire in order to supply the customer with the enhanced notification. You need to send the:
cancel_urllinks from the List Users API
Also, we are going to add an optional field to the Charges API which you should include when you want to charge the customer their initial full payment (post trial/discount). We’ll then still be able to send on your behalf the final requirement of the:
VISA will conduct spot checks and may ask us to block Sellers who are not using the Charges API in a compliant manner, so implementing these flows are important.
This email is different from the ‘pre-billing notifications’, which are sent to subscribers ahead of their recurring billing dates if you have them enabled.
The enhanced notification is instead a one-off email sent to a customer who is currently subscribed as part of an introductory trial or promotion. Before their first payment they’ll be sent an email which tells them their trial is about to end and provides them with the upcoming transaction date & amount, plus a link to manage their subscription.
The enhanced notification cannot be disabled because it’s part of the requirements.
As part of VISA’s rules we’ve also added this new email. This is sent when a subscriber makes their first payment on a subscription following a trial or discounted period.
This is the last time we’re required to give them a link to manage their subscription. After this point the subscription emails and receipts do not include any prompts for the customer to update their payment method or cancel their subscription.
It’s possible that these emails may prompt customers who did not want to pay a recurring fee to contact you regarding cancellation.
However, for the majority of customers, the increased transparency with subscription details leads to a better customer experience and improved brand perception.
The updates to the receipts happened this week (June 2020), and the updates to the emails - including the new emails - will roll out in July 2020.