
Mastercard will stop free trials from automatically billing once they're over - hbcondo714
https://newsroom.mastercard.com/2019/01/16/free-trials-without-the-hassle/
======
mc32
Hurray! This is stupendous! I wish other CC brands follow the lead here in
slaying this nefarious anti-pattern. There are so many services which require
_you_ to actively go and cancel when all you wanted was to trial something,
but they required you to commit a CC knowing there'd be a large percentage of
people who forget to cancel.

Thank you MC for raising the bar for other CC brands.

~~~
petilon
A good example is SiriusXM. They give you a lowball initial offer, and the
fine print says that at the end of the offer period the subscription will
automatically renew at "then current" rates. To cancel you have to call their
800 number (which of course will put you on hold long enough to make you give
up.)

MasterCard is making an awesome first step here. The next step is to insist
that companies must let you cancel subscriptions online, just like this
California law: [https://www.cnet.com/news/companies-must-let-customers-
cance...](https://www.cnet.com/news/companies-must-let-customers-cancel-
subscriptions-online-california-law-says/)

~~~
toufiqbarhamov
I’ve started stopping charges from my card rather than dealing with that kind
of “customer service” ever again. When the company finds they literally can’t
charge you, suddenly they have the time to _call you._ If you’ve tried to
cancel a service, stopped using it, and stop payment... well, the rest is
their problem.

~~~
jasonkester
Please don't do this.

I get customers doing this for Twiddla every few months despite sending
monthly receipt mails explaining how I'm happy to cancel their service and
even refund as many months of it as they like if they're not happy for any
reason.

But no. Some people would rather call their bank and accuse me of fraud than
reply to a mail (or click a prominent link on their account page).

No amount of reaching out to ask them to cancel a chargeback has ever worked.
It's baffling. Sure, it's a (way more complicated) way of cancelling your
subscription. But it affects my ability to run my business.

So yeah. Don't do this until you at least try clicking the cancel button on
the website.

~~~
krageon
If every other business has taught them that this is the only way to deal with
things and that actually going through the "official" cancellation procedure
is next to impossible (and an opportunity cost besides), I don't see how you
can ask them to stop doing it.

It's apparently a strategy that works, and just because it's inconvenient for
you doesn't make it their obligation to stop.

~~~
scrollaway
There's a just middle ground. If a service provides excellent unsubscribe flow
and refund options, is it a good idea to reward them by accusing them of
fraud?

Do it for the shitty services but at least do some basic homework first.

~~~
chii
Agreed : as a customer, you'd have to at least tried to call or cancel before
issuing a charge back.

~~~
lanterk
The website should have a very accessible cancel option. Especially
considering calling tends to entail reps trying to push you to keep the
account, and not everyone is comfortable having to give a reason for
cancellation.

------
pc86
I'm 100% in favor of this - if your business includes people paying you
without realizing it, or making it difficult or costly to cancel, you
shouldn't be in business.

However, won't merchants simply stop using free trials and go to a "$1 for 14
days" or similarly impulse-driven model? Sure the conversions compared to free
will be tiny but impulse buying is a real thing and dumping someone into a
$50/mo subscription after their $1 two week trial would still be complying
with this new rule.

~~~
snarf21
We really need better consumer protections. I know there has been more talk
that the ability to cancel must be as easy and the same manner as sign up. I'm
surprised but glad that Mastercard is helping in this way. It would be great
if they also added that other protections that are designed to take advantage
of poor and disadvantaged people like 20%+ interest rates and high late fees.

~~~
pc86
It's important to distinguish between things designed to take advantage of
poor people, and completely reasonable penalties/structures that happen to
affect poor people more because, not surprisingly, it's hard not to have
money.

20% interest is not inherent a bad thing and shouldn't be outlawed out of
hand. If you lend me $20 today and in exchange I pay you back plus buy you a
beer on Saturday, that's an astronomical interest rate.

I co-own a brick and mortar business and we charge the maximum late fees
allowed by law because people paying lay absolutely destroys our cash flow.
It's not because we actually want the late fees - we'd much rather have people
pay on time and be able to accurately plan for less money than have an influx
of onerous fees. It's not uncommon for a profitable business to fail because
cash flow is a problem.

~~~
craftyguy
20% of $20 has a MUCH smaller impact on someone who is suffering financially
than 20% of $1000 so your analogy is not really the same in terms of impact.

~~~
throwaway98121
Suffering financially has a pretty wide band. If you make $100k but only save
$100 or save nothing, I’d say your suffering financially.

If you work minimum wage and have a spouse or even just kids to support, 20%
of $20 isn’t chump change. You have to make every penny count. You’re in an
extremely difficult position.

------
greenyoda
Link to original source:

[https://newsroom.mastercard.com/2019/01/16/free-trials-
witho...](https://newsroom.mastercard.com/2019/01/16/free-trials-without-the-
hassle)

HN Guidelines say: "Please submit the original source. If a post reports on
something found on another site, submit the latter."

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
dang
OK, we've changed to that from
[https://www.theverge.com/2019/1/16/18185468/mastercard-
free-...](https://www.theverge.com/2019/1/16/18185468/mastercard-free-trials-
stop-automatic-billing-new-policy-rule). Thanks!

------
14
VISA sent Netflix my new card details. I thought since my card was new and
they didn't have the numbers and happened to lose my job at the same time
thought I was safe and was just going to quit Netflix. Instead visa sends them
the new numbers so I don't have a "disruption of service". Not cool visa.

~~~
Silhouette
This is absolutely routine in the card payments industry and has been for a
long time. People don't like having legitimate recurring charges disrupted
just because their card provider mails them some new plastic every few years.

If you want to cancel a service, _cancel it with the service provider_. Do not
rely on anything to do with any payment method that you happen to believe
might cancel it. Those mechanisms are for exceptional situations like an
abusive merchant who has made it unreasonably difficult to cancel through the
proper channels, not for your convenience in avoiding payments you've agreed
to make.

~~~
nmca
The incentives for the service provider are bad, the incentives for the
payment provider are not. Thus cancellation should be handled through the
payment provider.

~~~
cm2187
But cancelling the _payment_ doesn't mean you cancelled the _subscription_.
You might still owe the money. Unlikely some company will go to court for $20.
But for larger amounts it's not impossible.

~~~
14
And I guess now with MasterCard signing up for a trial does not mean I entered
a subscription. And for the record I did not owe netflix anything as they bill
first

~~~
Silhouette
Your guess is wrong. When you sign up for something, your agreement with the
provider will be governed by the contract you make with them. MasterCard are
not a legislative or judicial body, and we should be very wary of allowing
organisations like that with monopoly/oligopoly control of such a fundamental
aspect of the market to exercise quasi-judicial powers.

------
millstone
This is a lovely consumer-empowering move. Every service should be cancellable
without going through a Rentention Specialist.

I will plug a service I use (no other relation): privacy.com. It creates
credit cards with pre-set spending limits, one-time or recurring. 1-800-hold-
forever? No thanks, I'll just send the email and disengage the money hose.

Hopefully this sort of service becomes widespread, and services become less
dependent on high-friction in cancellation.

~~~
saagarjha
Presumably, the merchant I'm dealing with gets enough information about me to
identify me. Couldn't they maintain a "blacklist" of people who use Privacy
cards?

~~~
igetspam
Privacy works by buying large blocks of gift card numbers and issuing them on
demand. A vendor can (and some do) reject gift cards. For those that don't,
you can use any billing name/address you'd like and the cards will verify.
Privacy uses the car number + expiration + cvv2 code to validate the card.
I've had a single merchant reject a purchase because I used "${merchant_name}
Customer" as the billing name. I also us a blackhole mailing address to avoid
the seemingly natural inclination of various vendors to send paper mailers
that I don't want.

------
yason
I welcome Mastercard's move at the issue. If you do give your c/c number for
free trials then this is probably most useful.

Aside from that, I don't think I've ever given my c/c number for any "trial
period" offer. I've mostly ever used the usage of that scheme as a red flag to
steer away from the business before even considering signing up for anything.

This is not merely because I'm lazy and I don't want to even think about
remembering to cancel but because I probably wouldn't want to use such a
service at all. The shabbiest businesses are heavily infested with this sort
of trickery, but even some good businesses have followed. It doesn't bring any
value to the user except one more place where you c/c details can leak away,
one more thing to remember and potentially an extra charge that will just
upset you.

Trial periods can be implemented without a credit card if you really want to.

~~~
ddebernardy
That's correct when you're a business but not when you're dealing with
consumers. Some of the latter will have no qualms creating new email addresses
to "renew" their trial periods, effectively giving you free riders and bunk
operational stats.

~~~
dingaling
Frankly if your paid-tier is so underwhelming that people would 'bunk off' and
keep renewing free trials then I think your offering sucks.

Look at current Flickr, trying to force users into a one-size Pro membership.
They're not listening to light users who won't pay $50 + taxes + currency
conversion fees to get 'stats and partner offers'. Instead people are creating
multuple accounts and storing 999 photos in each, for free. Flickr should be
in that space with $10 Basic accounts

~~~
sethammons
Sure, there are businesses that need better pricing. There are also people who
will go through extraordinary efforts to get something for "free" (ignoring
the cost of their efforts). I'm fairly sure that if you had a service that
changes $1 to $2 that you would have people figuring out how to not give that
$1.

~~~
melcor
That's true, but those people would most likely never be paying customers. If
you could get 10% of the freeloaders to become paying customers by adding a
lower price bracket that would be a win for the business.

------
inanutshellus
Unless I'm misreading it, the title of the HN link and the article's meaning
don't match.

"Mastercard will stop free trials from automatically billing once they're
over" is not the same as "merchants will be required to send the cardholder [a
message] with explicit instructions on how to cancel a trial."

The former implies you can't do recurring payments where the initial payment
was a non-capturing authorization. The latter implies, well, mastercard
expects you to get an email from your vendor (e.g. your newspaper or
whatever). I suppose said email could be as obtuse as "See website for
subscription information".

~~~
edoloughlin
From the article: "The rule change will require merchants to gain cardholder
approval at the conclusion of the trial before they start billing".

~~~
brandon272
But how?

~~~
xeromal
Asking the customer to confirm by call, text, or email

------
rahimnathwani
The first paragraph suggests you'll need to explicitly aurhorise the first
payment.

The third paragraph suggests you'll just receive cancellation instructions
before the first payment.

The former would be a massive improvement. The latter is similar to what most
(sadly, not all) companies do already.

Not sure which is the case. Anyone got a better source?

~~~
nobrains
Yes. This was my same thought. So what if they will send you instructions to
cancel? As petilion
([https://news.ycombinator.com/user?id=petilon](https://news.ycombinator.com/user?id=petilon))
mentioned here
([https://news.ycombinator.com/item?id=18927948](https://news.ycombinator.com/item?id=18927948))
the instructions are designed to make you give up the cancellation process.

The right mechanism should be to request explicit authorization.

~~~
sirn
The whole credit card payment system is built on another legacy system (we
have emboss letter on credit card because of compatibility with a zip-zap
machine!) so having explicit authorization consent for recurring payment is
probably not going to be as easy as it seems. The last time payment industry
tried to do something that resembles an explicit user consent, it resulted in
the 3-D Secure system, which is horrendous and not even secure.

~~~
Silhouette
_The last time payment industry tried to do something that resembles an
explicit user consent, it resulted in the 3-D Secure system, which is
horrendous and not even secure._

Meanwhile, merchants in Europe are looking forward to the new Strong Customer
Authentication rules under PSD2 that will come into effect later this year. At
least it will be interesting to have hard data on how much damage that causes
and whether the damage is worse than the cost of fraud it will supposedly
prevent.

~~~
sirn
AFAIK the new Strong Customer Authentication will be based on 3-D Secure 2,
which as far as I know is basically bundling a couple of existing verification
method (e.g. AVS, Address Verification System) under a new scheme and fallback
to 3-D Secure authentication if the trust level isn’t met.

The issue is that, well, the whole scheme is designed to protect the merchant
(via liability shift) and not the user, and we still have to trust the bank to
“verify” us (might not be a big problem in EU, but in Asia it’s still common
to have OTP code over SMS or even... a 6 digit passcode)

------
hirundo
I've just implemented and rolled out a trial-to-recurring feature for about
100 websites. I wish this post was more clear about how I need to update this
feature to be compatible with this change.

> The rule change will require merchants to gain cardholder approval at the
> conclusion of the trial before they start billing

We get approval for the recurring charges at the start of the trial.
Apparently this is now not enough for MC. This sentence makes it sound like
the user will have to opt in at the end of the trial to get billed. But the
next sentence is:

> To help cardholders with that decision, merchants will be required to send
> the cardholder – either by email or text – the transaction amount, payment
> date, merchant name along with explicit instructions on how to cancel a
> trial.

That sounds like we need to notify the user, but just to give them the
opportunity to opt out, not requiring them to opt in. So which is it? Opt in
or opt out at the end of the trial?

I'll have to make changes one way or the other, but do I need to just send out
the notification and point them to the cancellation page, or do I need to
notify them and send them to a go-ahead-and-start-charging-me page before we
can start charging them? Can anyone parse this?

~~~
stronglikedan
I agree that the wording is not clear, but just to be on the safe side, you
should probably eliminate the very obvious dark pattern of collecting payment
details for a "free" trial, and just ask them to enter their payment details
at the end of the trial.

~~~
hirundo
Is it so dark if you shine a bright light on it at the start? We collect
credit card info as part of the free trial signup, and clearly state the
recurring terms -- start date, amount and interval -- in a prominent box right
over the submit button.

If the transaction succeeds they immediately get a thank you email with the
recurring terms prominently repeated again. There's also a link to the
cancellation button, which is available immediately.

I've accepted this sort of deal as a user and think it's only nefarious if
it's not clear or if cancellation is difficult.

~~~
goliatone
You still need to send an email before the trial is about to go into paid mode

~~~
hirundo
That's fine. It looks like at least that plus an ongoing per-charge notice
will be mandatory. As a user I'd want to disable them, but it sounds like that
won't be an option. So I'd probably mark them as spam instead.

------
octosphere
A separate issue, but still annoying nonetheless: Stripe has some forms where
$x service costs for example $50.00 per year. After entering my CC
credentials, it charges my card, but then when the following year arrives, the
payment processor (Stripe) proceeds to then charge me for another year, and
there is no way to cancel. It just assumes that my card will be hooked up
forever (which is actually impossible since my CC will expire at a set year
and set month).

This is why I am an advocate of disposable CC services like Privacy[1] that
have a small window of time for the expiration and stops cards from being
sneakily charged without your consent. When I am charged without consent it's
like a dark pattern[2]

[1] [https://privacy.com](https://privacy.com) *

[2] [https://darkpatterns.org/](https://darkpatterns.org/)

* Note: Privacy.com is a U.S only service

~~~
pc86
If you buy a _yearly service_ and you get charged for a second year, you're
not being "sneakily charged without your consent." You have to accept some
level of responsibility to manage your own finances and know what you're going
to be charged for.

~~~
aeharding
Meh. People forget pretty easily. I discovered this (wasn't trying to trick
people -- I gave full refund when requested) and implemented an email sent 7
days before charging the user for an annual subscription. Very easy to do with
Stripe, and now users blame themselves (and not me) when their card
accidentally gets charged for another year (procrastination after receiving
the warning email, usually).

~~~
pc86
Yes they do forget easily. Hence my point about taking a little bit of
responsibility. And saying that you're "sneakily charged without consent" is
pretty close to the exact opposite of "I am bad with my finances and/or
forgetful but I'm going to make it sound like you're a bad person."

------
liamcardenas
I see these sort of free trials as subsidies for non-lazy people by lazy
people. If you want to put in the effort -- you can get value, free of charge.

If merchants can't use that method any longer, I fear this will no longer be
an option for people willing to put the work in.

Then again... I am definitely a lazy one.

------
jeena
I wonder why this hasn't been solved by some kind of a law which would apply
to not only Mastercard a long time ago?

~~~
sachindhar
Because people who care about these types of issues don't have the
resources/will to run for political office.

~~~
alkonaut
Yeah but what about in places with functioning democracy, surely this must
already be the law _somewhere_?

~~~
bryanlarsen
Québec has such a law

------
nell
Good to see the promise of free market competition at work, although it is
happening within a duopoly bubble.

------
sdan
I'm going to switch to Mastercard for this single reason alone.

~~~
omosubi
MasterCard sells your data to Google fyi, not sure if the same can be said of
the other cc companies

I just wish I didn't have two of them

[https://www.bloomberg.com/amp/news/articles/2018-08-30/googl...](https://www.bloomberg.com/amp/news/articles/2018-08-30/google-
and-mastercard-cut-a-secret-ad-deal-to-track-retail-sales)

~~~
kevin_thibedeau
The same can be said of all CC companies. They've been playing this game for
50+ years.

------
Silhouette
_For each payment thereafter, the merchant will have to send a receipt to the
cardholder for each transaction by email or text message with clear
instructions on how to cancel the service if the consumer so desires. In
addition, all charges that appear on the cardholder’s statement must now
include the merchant website URL or the phone number of the store where the
cardholder made the purchase._

This looks like a significant change in policy. I wonder how merchants are
supposed to know about it unless they happen to have read a source like HN
today and found their way to the original MC article.

I also wonder what the consequences will be for non-compliance and what will
happen if a situation is misunderstood by a payment service like PayPal or
Stripe. For example, if we have a regular subscriber who is changing to a new
card, we will typically use the payment service's "trial period" facility to
delay the first charge on that new card until their regular renewal date so
they don't get double-charged for the period in between. That's not a trial
period in the normal sense of the term; to the customer, it just means they
carry on paying exactly as they have but payments start coming from their new
card instead. But there's not necessarily any way for a payment service to
know that.

~~~
swish_bob
The onus for communicating with the merchants will be put on the acquiring
bank.

------
smsm42
That's a great service. I've been avoiding such free trials as a rule because
I was concerned I'll forget to cancel or have to be subjected to a runaround
when trying to do so. Of course, this may make some companies forgo free
trials, as that was exactly what they counted on, but for me it would be net
benefit as I'll be able to do trials with companies that really honestly want
to show me their service and convince me to buy, without fear.

------
nathan_f77
I used to be guilty of this with FormAPI [1]. I heard that it was a good idea
to collect the credit card information in the sign up form, and then charge
the card automatically after the 7-day free trial. But then people would just
forget about it and I would basically be stealing their money for a few months
until they cancelled. I had to refund a few people who were angry about it.

I removed the credit card field from the sign-up form. I was also thinking
that this might reduce friction, but I think it actually lowered my
"conversion rate". (In quotes because it doesn't really count if you "convert"
people who just forgot about it.)

Another way would be to keep the credit input on the sign up form, but require
an explicit opt-in before I start the subscription. I don't know that would
help. If someone actually needs the service then they're going to add a credit
card. FormAPI isn't a "nice-to-have" service, it either solves your problem or
it doesn't.

[1] [https://formapi.io](https://formapi.io)

------
GlenTheMachine
...and free trials stop accepting MasterCard, maybe?

~~~
brettz
Or $1 trials when it's a MasterCard CC, then no need for a text/email.

~~~
vageli
That sounds like it would be against the merchant agreement. Plus, unless you
are your own payment processor, how would you know the card type?

~~~
brettz
All Visas start with 4 and MC start with 5. I think you're right though, I
doubt they allow price changes based on card type.

~~~
vageli
How would you see the credit card number at all unless you are the payment
processor? Payment processors show the interface into which the credit card
number is entered.

------
pbreit
Current HN headline does not match source headline.

HN: " Mastercard will stop free trials from automatically billing once they're
over"

Source: "Free Trials Without The Hassle"

And the source posting provides no indication that Mastercard will actually
stop any billing. But instead is requiring merchants to notify customers via
email/text how to cancel and send a receipt on each re-bill.

------
maxxxxx
Paypal has monthly subscriptions but you can cancel them from the PayPal site.
It's a pretty nice feature.

------
brandon272
> For each payment thereafter, the merchant will have to send a receipt to the
> cardholder for each transaction by email or text message with clear
> instructions on how to cancel the service if the consumer so desires.

Does this mean that for any service offering a free trial, every subsequent
post-trial payment must come with an email or text receipt? What if it's a
recurring service but it didn't have a free trial? Is the email/text receipt
still required as part of Mastercard's rules?

If it only applies to free trials, it sounds like a lot of merchants will
simply stop offering free trials.

I'm curious to see by which mechanism merchants are to "gain cardholder
approval at the conclusion of the trial before they start billing".

------
sailfast
Cool service for consumers. From a business perspective, if you depend on
subscriptions there are plenty of other payment methods that will likely work
just fine for these recurring bills.

Somewhat snarky question: Do you think they will do this for their own annual
fees?

------
richardknop
This is a good step but it should be a law that applies industry wide. The
dark pattern of offering free trials and only mentioning it will start a
recurring billing after the trial ends in tiny letters somewhere in the fine
print or buried in T&C is outrageous. It should be illegal to do this. If you
offer a 14 day free trial, you should stop service after 14 days and then
require explicit consent from customer to start recurring billing (you can
send email to the customer before the trial ends asking them to give consent
to start billing after it ends but it should not be automatic).

------
ryansmccoy
Get a prepaid credit card from walgreens/cvs/shiftcard, download the app, add
instant transfer from bank account, then only use/add money to when needed for
services that require credit card for trial.

------
camerondoll
When I worked at one company where we had such scheme about 10% never
cancelled and never used the service after a day or so. They were billed for
years. I can't see this going away.

------
acosmism
nice. classic gym model is - get your routing and checking # , understand that
you are likely never to use the gym after you forget your new years
resolution, and then make it impossible to cancel. try signing up to planet
fitness without having to give them a void check. canceling requires visiting
the location from which you signed up from in person with a hand written
letter. im glad there is budding competition in this space (banking). keeps
companies like MastC in check

~~~
jchw
Planet Fitness did this crap to me. I actually used it but I moved and now I
have a closer gym. Luckily, I had just moved to California, which had just
mandated that you must be able to cancel a service online if you signed up
online (Senate Bill No. 313.) After honestly very empty legal threats it was
confirmed that my account was closed.

Of course, if you really want to cause trouble you can do an ACH chargeback,
but that could backfire.

------
EastSmith
Nice. Next they should fix the yearly renewals. It's been couple of times
where I'd subscribe for a service for a year, use it couple of months, then
stop using it and forget about it.

Suddenly a year later they take $100 or whatever without any prior notice. An
email like "You have an yearly subscription with us. We will charge you $100
again next week." should be a standard.

------
darylteo
So as a service operating a subscription model, what steps do I need to take
now to accomodate this new payment flow? I am with Stripe.

I'm assuming the simple answer is to simply not accept credit cards for free
trials but I don't know if my clients will like this answer.

------
brokenmachine
Will this help in any way with gyms that are easy to sign up for, but
impossible to leave?

------
dwighttk
They call it “free trials without the hassle” and I’m glad they are doing it,
but I bet there will be many fewer companies willing to offer free trials _if
the opt out rate at the end of trials is high enough_

~~~
imtyler
If the cost of maintaining one's business practices requires subsidization by
means of deception then really shouldn't matter.

Even if you're one of the ones who are benefitting and not getting screwed.

------
joezydeco
Whatever happened to the one-time-use numbers that cards like Discover would
generate on demand?

Why wouldn’t that work for a trial-to-buy setup that’s programmed to fail once
the trial is over?

~~~
cronix
Those can be determined by the CC number, and a lot of companies (and some
processors) just won't accept them (they're used a lot for money laundering
since you can buy them with cash). For instance, Stripe reports them as
"prepaid" and you can reject them.
[https://stripe.com/docs/api/cards/object#card_object-
funding](https://stripe.com/docs/api/cards/object#card_object-funding)

~~~
joezydeco
Didn't know they're now regarded as prepaid. Thanks for the tip.

------
tmp092
I can't recommend privacy.com enough for this very reason.

~~~
craigds
Looks awesome but as with all these services, only available in the US. So
irritating

~~~
mnx
in the EU, you can use revolut - their paid plan seems to provide a service
pretty similiar to privacy.com

------
nchlswu
This reminds me vaguely of when a provider automatically unsubscribes users
from newsletters they don't read.

Does anyone remember which company this is? Twitch?

------
wdr1
A good step forward, although I wish they required explicit consent to
continue. I.e., opt-in, not opt-out, for the renewal.

------
ggm
Like the outcome, hate the process.

1) it should be an industry-wide, international norm

2) it should be an obligation on the card issuer, enforced. By financial
regulation, worldwide.

I'm not a fan of industry self-regulation.

I'm not a fan of product differentiation by security model, in this space.
Sure, there are different kinds of risk and mitigation, this feels like
something which should be base-level norm.

~~~
noarchy
>it should be an obligation on the card issuer, enforced. By financial
regulation, worldwide.

Which worldwide financial body will make this happen? Mastercard did this
without any prodding from a government, as far as I know.

>I'm not a fan of industry self-regulation.

This simply seems like a case of a company offering something that customers
want. Is Mastercard working with these companies to the extent that we can
really call it "self-regulation"?

~~~
adrianratnapala
> This simply seems like a case of a company offering something that customers
> want

Part of the service that government regulation provides is dimensionality
reduction.

That is, when you buy X, you might weigh the price up against two to five
observable qualities, but there are a hundred more that you can't observe
until they bite you later. So capitalism needs some way collapsing those
unobservables down. The mechanisms I can think of is:

1\. Reputation of the vendor. 2\. _Other_ consumers observing what you can't.
3\. Government regulation to pin them down to an enforced standard. 4\. Other
private business partners enforcing government-like rules (for whatever
reason).

ggm prefers mechanism 3 to 1,2 and 4. Personally I don't have much faith in
any of these four mechanisms, though I am glad when any one of them actually
does work.

This seems to be a case are (2) has worked in that MC has decided to make an
obscure quality improvement that only some users will notice though many will
benefit from, and might become a case of (4) working if they really do cause
vendors to improve their behaviour.

~~~
ggm
Sure. And I hope it works, and I hope Visa responds and matches. But, rather
than "leave it to the market" I wonder why we let people do 'subscribed unless
you decline' models in the first place? They are inherently dangerous and risk
people incurring debt they had no intention of owning.

------
moneywoes
Hopefully other CC companies follow suit even though it hurts their own
revenue prospects.

------
wsc981
Porn sites are gonna hate this.

~~~
leroy_masochist
My first thought upon seeing the article title on HN was "hmmm what would be a
good porn stock to short today"

------
jayalpha
This will make many billing departments cry.

Another solution is to create a temporary virtual card.

------
sandyhatches
And ever forward we do march, the death of personal responsibility.

~~~
koala_man
>Well if you didn't want to be billed you should have waited on hold for 45
minutes and argued with a person whose bonus was unaffected by whether you
agreed to continue or hung up in frustration

No u

------
iicc
>Free Trials Without The Hassle

So all the free trials will become $0.01 instead.

~~~
allworknoplay
Read the article, it concerns subscription payments in general as well.

------
cmelbye
How will it be enforced?

~~~
tribby
that was my takeaway as well, I feel like I must be missing something

------
accnumnplus1
Bad day for Bezos.

------
black-tea
This won't even stop Amazon. If you forget to cancel your Prime subscription
they'll try charging you by putting a hold on the money before it's time to
pay. If that fails they'll try charging other cards and payment methods you
might have registered.

------
draw_down
Apps like Venmo and square cash have a “card” option you can turn on and off.
I turn it on for a minute so the auth will work, then turn it back off.

------
arthurcolle
they should get the Nobel Peace Prize for this.

------
sp527
Next they should require customer consent for recurring billing. That might be
more legislative in nature though (fat chance...).

~~~
jsmeaton
What other consent do you propose? The customer is already providing their
credit card details. The only secure way of providing recurring consent would
be something like a separate CVC.

~~~
TomMarius
You could have a checkbox on the 3D Secure gateway page.

~~~
jsmeaton
Again, that would need to be a new standard that all payment providers honour.
Not to mention 3DS is an optional extension for providers.

The dodgy ones aren't going to provide either 3DS or a secondary "are you SURE
you are ok with recurring payments?". The legit operators are already making
it obvious when something is a recurring payment.

The only secure way of getting customers to affirmatively consent to recurring
payments, that I can think of, is a separate CVC or similar that's printed on
the card. Still, I don't think this is a major problem worth solving. Most
customers signing up for recurring payments are aware of what they're doing.

------
miguelrochefort
They're not doing this to help consumers.

They're doing this to save money processing complains and refunds.

~~~
alkonaut
Isn't it possible for both things to be true at the same time?

------
gregoriol
What if you make a service that wants to bill at the end of the term? How
would Mastercard differentiate that from trial?

Also, apps like Uber, Bird, ... don't have payments until some time when you
use them, how will Mastercard know it is a usage vs a trial/renew payment?

~~~
tyfon
Via the MCC [1] (merchant category code) 5968.

[1]
[https://fs.fldfs.com/iwpapps/pcard/docs/MCCs.pdf](https://fs.fldfs.com/iwpapps/pcard/docs/MCCs.pdf)

