Mastercard rule changes for recurring charges: the impact on non-profit organizations

Mastercard credit card on table

Mastercard has proposed new rules for recurring billing and subscription style transactions, a move that could affect many organizations in the non-profit and charitable sectors in Canada.

The credit card giant will soon require all merchants to disclose the basic terms of subscriptions at the point of payment.  A specific donor consent will be required to proceed with the recurring subscription or donation.

Merchants will also be required to send an email to the donor prior to each billing with clear instructions for cancelling the subscription or donation electronically, similar to unsubscribing from commercial email messages.

While these policies were originally set to be take effect on September 22, 2022, the deadline for compliance has been extended to March 21, 2023.

While these changes may have been primarily intended for commercial enterprises, non-profit and charity organizations using recurring billings and subscriptions for donations or other forms of support will need to comply with these new rules. It is anticipated that other credit card companies may also implement similar changes.

Next steps if this impacts your organization

If you are using credit cards to process recurring donations or subscriptions, here are some steps you can take to address the changing rules:

1.  Review the new Mastercard requirements to understand what changes, if any, will be required to your processes.

2. Develop a plan to address the changes you need to make to your processes. The requirements may include changes to your donor platform, website or communication tools. Implementing changes to your technology may take a significant amount of time, so identifying the changes needed and communicating with your internal and external IT service providers early will be key to meeting the March 21, 2023 deadline.

3. Consider whether your organization needs to communicate your process changes to existing donors or other stakeholders to ensure there is understanding about what is changing and how it impacts them.

4. Continue to monitor communications from credit card companies for further changes in requirements or deadlines.

If you do not have any recurring billings, or none under Mastercard credit cards, consider conducting a review of your current processes to determine if any changes should be implemented as a best practice. If other credit card companies implement similar changes, this will allow you more time to meet any requirements.

If your organization does not use any recurring billings, perhaps the change in rules represents an opportunity to implement new processes and obtain new sources of support for your activities.

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