How do I manage recurring transactions?

Last updated 8 months ago

If your business processes recurring transactions for goods and services such as monthly insurance premiums, subscriptions, membership fees, etc., you should obtain cardholder approval for the ongoing charges. We recommend the including the following:

• Cardholder name
• Address
• Card Account number
• Expiration date
• Recurring schedule (dates, amounts, frequency, etc.)

If the recurring product/service is renewed and the agreement is materially changed, you should obtain an updated agreement with the updated information indicating the agreement to the continuation of the charges (or agreement to the continuation of the charges with the new terms).

If a cardholder provides notice of cancellation, you must immediately cancel any future transactions. To maintain appropriate documentation, we recommend you indicate “recurring transaction” or “signature on file” on receipts in the absence of a cardholder’s signature.

An initial authorization is not a guarantee that future transaction authorizations will be approved or paid.

At the time the recurring schedule is initiated, we recommend submitting the CVV, CVC2, or CID as an added layer of security; however, this information should not be stored or transmitted on future recurring transactions.

It's recommended that you maintain periodic contact with the cardholder to:

• Verify their information is still accurate (card number, expiration date, billing address, etc.)
• Provide your Customer Service Number and cancellation instructions
• Notify the next billing date or subscription details (frequency, amount, etc.) and the number of payments remaining, if applicable

To prevent future chargebacks, the following are recommendations for any recurring billing customers:

• Ensure that the process for cancellation is simple and process cancellation requests promptly
• Clearly disclose all material terms and conditions, including whether the recurring plan will continue until canceled by the cardholder
• Provide clear refund policies for cardholders who cancel after a recurring payment is made
• Send reminders of upcoming payments with an option to cancel

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