{"id":35924,"date":"2022-11-03T10:28:17","date_gmt":"2022-11-03T14:28:17","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=35924"},"modified":"2022-11-03T10:28:20","modified_gmt":"2022-11-03T14:28:20","slug":"charities-and-mastercard-policy-changes","status":"publish","type":"post","link":"https:\/\/cccc.org\/news_blogs\/legal\/2022\/11\/03\/charities-and-mastercard-policy-changes\/","title":{"rendered":"Charities and Mastercard Policy Changes"},"content":{"rendered":"\n

When Mastercard changed its policy requirements for subscription payments, that impacted charities. Charities were subject to additional administrative requirements even though recurring donations really weren\u2019t part of the problem. The new requirements have since become only recommendations<\/em> for charities, unless a charity is subject to a Mastercard compliance monitoring program for four months. Read on for all the details.<\/p>\n\n\n\n

What\u2019s this all about?<\/h3>\n\n\n\n

Effective September 22, 2022, Mastercard revised its policy requirements for all merchants using a subscription model. As described by US-based The Nonprofit Alliance<\/a>, Mastercard\u2019s intention was \u201cto mitigate negative practices associated with the utilization of a subscription billing model and\/or a negative billing option.\u201d In other words, to protect consumers from being scammed through sketchy subscription or \u201copt-out\u201d billing practices. These often arise after signing up for \u201cfree trials\u201d for various goods and services.<\/p>\n\n\n\n

The policy\u2019s impact on charities<\/h3>\n\n\n\n

Mastercard was clear in a Q&A document<\/a> that \u201cIf a customer is donating to a charity on a recurring basis\u201d that \u201cwould be considered a subscription service.\u201d<\/p>\n\n\n\n

This policy was an issue for charities because (1) it would increase administrative burdens and (2) charities were not contributing to the problem Mastercard was trying to address.<\/p>\n\n\n\n

Extended Effective Date<\/h4>\n\n\n\n

After discussing the issue with the charitable sector, the effective date for nonprofits was extended<\/a> to March 21, 2023.<\/p>\n\n\n\n

Entirely Revised Policy<\/h4>\n\n\n\n

Most recently, Mastercard has entirely revised its policy<\/a> to make the requirements optional for charities, except in certain circumstances. Mastercard will focus its efforts on merchants who \u201cfail to properly manage cardholder complaints and chargebacks related to a subscription\/recurring payment plan.\u201d<\/p>\n\n\n\n

The requirements are now recommended best practices <\/em>for charities with recurring Mastercard donations.<\/p>\n\n\n\n

But the recommendations become requirements <\/em>for charities that are \u201cidentified for at least four months\u201d in the Acquirer Chargeback Monitoring Program<\/a> (ACMP). What is ACMP? It\u2019s basically a program used by Mastercard to identify merchants that have excessive chargebacks and to bring them into compliance with Mastercard standards.<\/p>\n\n\n\n

The policy\u2019s recommended best practices<\/h3>\n\n\n\n

What are the best practices (that could become requirements)?<\/p>\n\n\n\n

At sign-up:<\/strong><\/p>\n\n\n\n

  1. Disclose the basic terms of the donation at the time of donation sign-up. It should include:
    1. Amount of donation<\/li><\/ol>
      1. Frequency of donation<\/li><\/ol>
        1. Note: linking to a page with this info is not sufficient<\/li><\/ol><\/li>
        2. Record the donor\u2019s acceptance of the basic terms<\/li>
        3. Send a confirmation email or text to the donor at the time of enrolment. The confirmation should include:
          1. Terms of recurring donation<\/li><\/ol>
            1. Clear instructions on how to cancel<\/li><\/ol><\/li><\/ol>\n\n\n\n

              After sign-up:<\/strong><\/p>\n\n\n\n

              1. Provide an online or electronic way to cancel<\/li>
              2. Provide an electronic receipt for each transaction. The receipt must: